Health Care M&A Deal Volume and Value Both Set New Records in Q3: 2015, According to Health Care M&A News

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

NORWALK, CT – October 27, 2015 – Health care merger and acquisition activity increased by 18% in the third quarter of 2015, compared with the second quarter of the year. Deal volume in the third quarter rose to 385 transactions, from 327 in the previous quarter. The 385 deals marked the highest number of transactions in any previous third quarter. Combined spending in the third quarter hit $198.3 billion, a new record for all previous quarters, third or otherwise. The total represents a 265% increase over the second quarter’s $54.3 billion, and an increase of 214% compared with the same quarter in 2014 ($63.2 billion), according to Health Care M&A News
                        The Health Care M&A Market – Deal Volume by Sector

  Q3:15 Q2:15   Q3:14  
Sector
Services
Deals Deals %
Changed
Deals

%
Changed

Behavioral Health Care 10 6 67% 4 150%
Home Health & Hospice 9 6 50% 15 -40%
Hospitals 33 24 38% 19 74%
Laboratories, MRI & Dialysis 16 15 7% 8 100%
Long-Term Care 90 65 38% 85 6%
Managed Care 12 8 50% 5 140%
Physician Medical Groups 15 22 -32% 14 7%
Rehabilitation 7 6 17% 5 40%
Other 46 40 15% 36 28%
     Services subtotal 238 192 24% 191 25%
Technology          
Biotechnology 41 34 21% 27 52%
eHealth 33 34 -3% 34 -3%
Medical Devices 31 29 7% 26 19%
Pharmaceuticals 42 38 11% 67 -37%
      Technology subtotal 147 135 9% 154 -5%
Grand Total 385 327 18% 345 12%

Source: Health Care M&A News, October 2015

 

Health care services represented 62% of the third quarter’s transactions, slightly higher than the previous quarter (57%), as well as the same quarter in 2014 (55%). Still, the 238 deals represented a 24% increase over the previous quarter (192 deals). Only one of the sectors, Physician Medical Groups, posted a decline in transaction volume, while Behavioral Health Care managed a 67% gain over the previous quarter.

On the technology side, transaction volume was strong in the Biotechnology and Pharmaceutical sectors, up 21% and 11%, respectively, over the previous quarter. Compared with the same quarter in 2014, Biotech transactions were up 52%, while Pharmaceuticals were off 37%.

“Transaction volume in the third quarter erased all doubt that M&A in the health care industry is slowing,” said Lisa E. Phillips, editor of Health Care M&A News. “The massive spending is largely the result of two deals in the Managed Care sector—the Aetna/Humana and Anthem/Cigna acquisitions—which contributed a combined $91 billion to the quarter’s total. Subtracting those two deals from the total still leaves approximately $107 billion. While that amount isn’t a record for health care M&A spending in a quarter, it’s a strong sum nonetheless.”

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. If you would like to receive future releases, please email pressreleases@levinassociates.com.