Health Care M&A Spending Leaps 171% in Q2:2014, Compared with Q1:2014, According to Health Care M&A News

FOR IMMEDIATE RELEASE  
Lisa E. Phillips, Editor
Stephen M. Monroe, Partner
 800-248-1668
 203-846-6800
 Fax: 203-846-8300
 pressreleases@levinassociates.com

 

NORWALK, CT – July 16, 2014 – Spending on health care mergers and acquisitions hit a new record for second quarter spending, according to Health Care M&A News. The combined total for M&A activity in the second quarter reached $135.2 billion, up 171% compared with the first quarter spending total ($49.9 billion), and up 152% versus the same period the year before ($53.6 billion).  The vast majority of that combined spending—91%—came from transactions on the Technology side, while Services contributed just 9%.

Total Deal Value, Q2:14 vs. Q1:14 and Q2:13

 

Q2:14

Q1:14

 

Q2:13

 

 

   

Change

 

Change

Services

 $12,250,352,900

 $12,621,647,000

-3%

 $13,155,770,700

-7%

Technology

 $122,922,049,570

 $37,343,526,688

229%

 $40,401,928,000

204%

Total

 $135,172,402,470

 $49,965,173,688

171%

 $53,557,698,700

152%

Source: Health Care M&A News, July 2014

Deal volume also increased substantially in the second quarter, up 13% versus the previous quarter, to 297 transactions. The quarter also gained (20%) in comparison with the second quarter a year ago, when 248 deals were announced. Services transactions accounted for 52% of the Q2:14 deal total, and Technology transactions made up 48%.

Deal volume surged on the Technology side, to 143 deals, an increase of 31% compared with the previous quarter. Dollar volume exploded by 229%, to nearly $123 billion. While multi-billion-dollar pharmaceutical deals made headlines in Q2:14, the Medical Device sector actually turned in the highest dollar volume among the Technology segments, thanks to the $42.9 billion acquisition of Covidien plc by Medtronic Inc., which made up the majority of the total $59.1 billion spent in that sector. Pharmaceuticals had a combined total spending of $56.4 billion for the quarter.

On the Services side, deal volume remained flat at 154 deals, down 1% compared with the previous quarter. Dollar volume was also stagnant at $12.3 billion, representing a 3% drop in the same period, although this segment typically has fewer prices disclosed. Long-Term Care transactions led this category, with 60 deals and $5.2 billion in combined spending. The Physician Medical Group sector posted 15 transactions for the quarter (up 15% vs. Q1:14), but reported an unusually large deal for this sector, at $2.35 billion, as Amsurg Corp. acquired Sheridan Healthcare Inc. from private equity firm Hellman & Friedman.

“Now that the health information exchanges are functioning, investors have decided that health care is a good place to be,” said Lisa E. Phillips, editor of Health Care M&A News. “The equity markets are still rewarding the big-deal makers, as well. At this point, it looks as if this momentum could carry well into the third quarter.”

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

 

Q2:14

Q1:14

 

Q2:13

 

Sector

Deals

Deals

Change

Deals

Change

Services

 

 

 

 

 

Behavioral Health Care

7

5

40%

5

40%

Home Health & Hospice

14

15

-7%

18

-22%

Hospitals

9

13

-31%

22

-59%

Labs, MRI & Dialysis

7

11

-36%

10

-30%

Long-Term Care

60

63

-5%

56

7%

Managed Care

8

5

60%

3

167%

Physician Medical Groups

15

13

15%

17

-12%

Rehabilitation

6

2

200%

5

20%

Other

28

28

0%

29

-3%

Services subtotal

154

155

-1%

165

-7%

Technology

       

 

Biotechnology

34

26

31%

16

113%

eHealth

28

21

33%

10

180%

Medical Devices

31

27

15%

25

24%

Pharmaceuticals

50

35

43%

32

56%

Technology subtotal

143

109

31%

83

72%

Grand total

297

264

13%

248

20%

Source: Irving Levin Associates, Inc., July 2014

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’ subscriptions, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, Connecticut 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.