Health Care M&A Spending Grows in Q2 2013, Compared with Q1 2013, According to Irving Levin Associates, Inc.
|FOR IMMEDIATE RELEASE||
Stephen M. Monroe, Editor
NORWALK, CT – July 29, 2013 – Health care merger and acquisition activity strengthened in the second quarter of 2013. Deal volume was up 10% versus the previous quarter, with 223 deals announced. However, the quarter underperformed (-15%) in comparison with the same quarter a year ago, according to The Health Care M&A Report. Deal value rose significantly compared with the previous quarter. The preliminary total for health care M&A activity in the second quarter is $52.6 billion, up nearly 252%, compared with the $14.9 billion spent in Q1:13. Deal value held steady compared with the second quarter of 2012, when buyers committed $52.3 billion.
Source: Irving Levin Associates, July 2013
The health care services sector still managed to post a 16% gain over Q1:13, with 145 deals announced, and eked out a 1% increase versus Q2:12. The health care technology sector remained steady, with 78 deals announced in each quarter. Biotechnology, Pharmaceuticals and Medical Devices each showed an uptick in M&A activity, while eHealth held the sector back from greater gains.
“The health care merger and acquisition market is held hostage to the onset of the Affordable Care Act,” said Lisa E. Phillips, editor of The Health Care M&A Report. “Some services sectors, such as Home Health and Hospice, Long-Term Care, Physician Medical Groups and Rehabilitation, are seeing continued activity, thanks to the move toward Accountable Care Organizations.”
The Biotechnology sector experienced a strong rebound, up 55%, with 17 deals announced in the second quarter. Eleven transactions were initiated by other biotech companies, and five acquirers were pharmaceutical companies hoping to bolster their product pipelines. One private equity firm, Ares Life Sciences, purchased a biotech company, Antigen Laboratories.
Pharmaceutical companies were also busy buying other pharma companies, or certain assets of other pharmas. Fifteen of the 30 announced deals in this sector involved the rights to drugs still in clinical trials, rights to commercialize drugs in new geographic markets or the intellectual property rights to promising early-stage drugs.
“Expect the Biotech and Pharmaceuticals sector to stay active,” Ms. Phillips said. “Investors are paying a lot more attention, thanks to the surge in the biotech IPO market this year. Valuations are a bit crazy right now, with Onyx Pharmaceuticals looking for more than $120 per share. How that deal plays out will set the tone for the healthcare technology sector through the end of the year.”
For more information on The Health Care M&A Information Source or The Health Care M&A Report, or for a membership to any of Irving Levin Associates’ subscriptions, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at www.levinassociates.com. This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition databases, on the health care and senior housing markets.