Health Care M&A Deal Volume Slips in Q1:2016, As Deal Value Surges, According to Health Care M&A News

FOR IMMEDIATE RELEASE

Lisa Phillips

Editor

800-248-1668
203-846-6800
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NORWALK, CT – May 3, 2016 – Health care merger and acquisition activity began to slow down in the first quarter of 2016. Compared with the fourth quarter of 2015, deal volume decreased 7%, to 351 transactions. Deal volume was also down 7% compared with the same quarter the year before. Combined spending in the first quarter reached $79.5 billion, an increase of 87% compared with the $42.5 billion spent in the previous quarter, according to Health Care M&A News. 

 

Health care services represented 62% of the first quarter’s transaction total, slightly lower than the 67% share reported in the previous quarter. The decline is due in part to slow-downs in nearly all of the services sectors, resulting in a 14% decline in deal volume in Q1:16 on the services side. The Home Health & Hospice and Rehabilitation sectors, however, saw higher deal-making activity with increases of 50% and 43%, respectively. 
 
On the technology side, transaction growth in the eHealth and Medical Devices sectors continued, up 17% and 7%, respectively, over the previous quarter, and both up 35% compared with the first quarter in 2015.
 
“The slowdown in deal volume in the first quarter of 2016 might simply be fatigue setting in after a record-setting year in 2015,” said Lisa E. Phillips, editor of Health Care M&A News. “Also, some buyers are still figuring out where the best opportunities are, as the shift to value-based reimbursements gains momentum.” 
 
M&A activity is likely to reflect this recent slowdown in the coming quarter. “A lot of private equity firms that made big exits last year now have a lot of cash that they’d like to put to work,” Ms. Phillips said. “That said, valuations are still too high for many buyers. They’re going to wait and see if prices start to come down.”
 
For more information on The Health Care M&A Information Source or Health Care M&A News, or for a membership to any of Irving Levin Associates’ services, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, is headquartered in Norwalk, Connecticut and is online at www.levinassociates.com.  This privately held corporation publishes annual and quarterly research reports, monthly and weekly newsletters, and maintains merger and acquisition databases on the health care and senior housing markets. 

 

 

 

The Health Care M&A Market – Deal Volume by Sector

 

 

Q1:16

Q4:15

Q1:15

Sector

Deals

Deals

Change

Deals

Change

Services

 

 

     

Behavioral Health Care

8

13

-38%

8

0%

Home Health & Hospice

18

12

50%

17

6%

Hospitals

23

23

0%

24

-4%

Laboratories, MRI & Dialysis

8

16

-50%

5

60%

Long-Term Care

82

106

-23%

76

8%

Managed Care

8

12

-33%

11

-27%

Physician Medical Groups

18

22

-18%

24

-25%

Rehabilitation

10

7

43%

9

11%

Other

40

41

-2%

48

-17%

   Services subtotal

216

252

-14%

222

-3%

 

 

 

 

 

 

Technology

 

 

 

 

 

Biotechnology

30

21

43%

62

-52%

eHealth

35

30

17%

26

35%

Medical Devices

31

29

7%

23

35%

Pharmaceuticals

39

44

-11%

44

-11%

   Technology subtotal

135

124

9%

155

-13%

 

 

 

 

 

 

Grand Total

351

376

-7%

377

-7%