Health Care M&A Deal Volume Ends 2013 on a High Note, According to Health Care M&A News
|FOR IMMEDIATE RELEASE||
Lisa E. Phillips, Editor
Stephen M. Monroe, Editor
NORWALK, CT – February 3, 2014 – Health care merger and acquisition activity increased marginally in the fourth quarter of 2013, compared with the previous quarter. For the full year, Q4:13 marked the highest level of deal-making. Deal volume rose 4% versus the third quarter, with 281 deals announced. This year’s fourth quarter did not outperform the same quarter a year ago, when 310 deals were announced, according to Health Care M&A News.
Source: Health Care M&A News, January 2014
The Technology sector showed particular strength, with each segment turning in positive performances. Technology deals increased 20% overall compared with Q3:13. eHealth transactions staged a strong comeback, up 41%, as health care providers shifted their attention to data analytics as a means to cut costs and improve patient outcomes. After a year-long slump in deal volume, the Medical Device sector showed some improvement, although it was still off the pace set in Q4:12. Biotechnology companies got a boost as pharmaceutical companies slashed R&D spending and turned to promising startups to replenish their product pipelines. In the Pharmaceutical sector, generics and specialty pharmaceutical companies were in high demand.
The Services sector did not fare as well, ending the fourth quarter with a decrease of 6% in deal volume. Several segments saw gains, however, as acquirers shifted their attention to the post-acute care sectors, particularly Long-Term Care (+10%), Home Health & Hospice (+100%) and Rehabilitation (+50%). Physician Medical Groups were still hot commodities for health systems, hospitals and public companies, as deal volume rose 33% in the fourth quarter, compared with the previous quarter.
Full-year totals for 2013 showed fewer deals announced, but higher prices paid. Preliminary figures show 1,002 healthcare deals were announced, down 8% compared with the 1,091 recorded in 2012. Deal value surpassed 2012’s total: approximately $163.5 billion was committed to deals in 2013, compared with the abysmal total spend of $143.7 billion the year before. The Long-Term Care sector hit a record 223 deals last year, with the Pharmaceutical sector ranking second, with 151 deals announced.
“The health care market is moving beyond the uncertainty that surrounded implementation of the Affordable Care Act,” said Lisa E. Phillips, editor of Health Care M&A News. “Acquirers now are investing in improving patient outcomes, whether it’s buying a long-term care facility or a data analytics company that will help to streamline operations and contain costs.”
M&A activity is likely to remain strong in 2014. “The impact of long-set regulations will influence some deals, such as the switch to the ICD-10 coding system on October 1,” Ms. Phillips said. “The influx of newly insured consumers has already influenced some transactions, and will impact many more in the future.”
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