Health Care M&A Deal Volume and Value Both Slowed in Q2: 2015, According to Health Care M&A News

IMMEDIATE RELEASE  
Lisa E. Phillips, Editor
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NORWALK, CT – July 28, 2015 – Health care merger and acquisition activity dropped by 13% in the second quarter of 2015, compared with the first quarter of the year. Deal volume in the second quarter slipped to 315 transactions, from 361 in the previous quarter. The combined spending total in the second quarter was just $54.2 billion, a decrease of 49% compared with the $106.1 billion spent in the previous quarter, according to Health Care M&A News.

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

  Q2:15 Q1:15   Q2:14  
Sector
Services
Deals Deals %
Changed
Deals

%
Changed

Behavioral Health Care 5 8 38% 7 -29%
Home Health & Hospice 5 16 -69% 16 -69%
Hospitals 23 23 0% 24 -4%
Laboratories, MRI & Dialysis 11 4 175% 7 57%
Long-Term Care 64 70 -9% 62 3%
Managed Care 7 10 -30% 8 -13%
Physician Medical Groups 22 22 0% 16 38%
Rehabilitation 6 8 -25% 6 0%
Other 38 48 -21% 33 15%
     Services subtotal 181 202 -13 179 1%
Technology          
Biotechnology 34 60 -43% 35 -3%
eHealth 33 26 27% 30 10%
Medical Devices 29 23 26% 31 -6%
Pharmaceuticals 38 43 -12% 50 -24%
      Technology subtotal 134 152 -12% 146 -8%
Grand Total 315 361 -13% 325 -3%

Source: The Health Care M&A Report, July 2015

Health care services represented 57% of the second quarter’s transactions, roughly equal to the previous quarter (58%), but higher than the same quarter in 2014 (55%). Still, the 181 deals represented a 13% decline compared with the previous quarter (209 deals). Six of the nine services sectors posted a decrease in deal volume and two remained unchanged. Only the Laboratories, MRI & Dialysis sector showed a gain deal-making activity.

On the technology side, transaction volume slowed in the Biotechnology and Pharmaceutical sectors, down 43% and 12%, respectively, over the previous quarter, and off 3% and 24%, respectively, compared with the second quarter in 2014.

“The first quarter of 2015 really benefited from the M&A momentum that started in the fourth quarter of 2014. That slowed in the second quarter, but any quarter with more than 300 deals announced is still a good showing,” said Lisa E. Phillips, editor of Health Care M&A News. “With King v. Burwell decided, we’re seeing a strong pickup in health care M&A in the third quarter. In fact, July dollar volume has already surpassed $157 billion, which should put the third quarter at a new record. We’ll have to wait and see if the Federal Reserve raises interest rates in September, which could slow down deal volume again.”

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