FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
800-248-1668
Fax: 203-846-8300
pressreleases@levinassociates.com
HEALTH CARE M&A ACTIVITY ON TRACK FOR $100 BILLION MARKET IN 2002 According to Irving Levin Associates, Inc.
NEW CANAAN, CT –October 22, 2002 – A total of 207 deals were announced in 13 sectors of the health care industry, a 14% decrease from the 240 deals announced in the second quarter of 2002 but a 14% increase over the 181 deals of the third quarter of 2001. Even with the stock market meltdown, the health care M&A market has retained its vitality while deal volume in other sectors has plunged.
The Health Care M&A Market Q3:02 Deal Volume By Sector
Sector
Q3:02
Deals*
Q2:02
Deals
%Change
Q3:01
Deals
%Change
Services:
Hospitals
20
11
+82%
17
+18%
Long-Term Care
15
20
-25%
12
+25%
Physician Medical Groups
11
10
+10%
8
+38%
Laboratories
10
13
-23%
13
-23%
Home Health
8
18
-55%
7
+14%
Managed Care
5
14
-64%
4
+25%
Rehabilitation
3
6
-50%
1
+200%
Behavioral Health
1
4
-75%
5
-80%
Other
33
40
-18%
20
+65%
Services Subtotal
106
136
-22%
87
+22%
Technology:
Medical Devices
43
36
+19%
25
+72%
Pharmaceuticals
32
28
+14%
27
+19%
Biotechnology
18
21
-14%
26
-31%
e-Health
8
19
-58%
16
-50%
Technology Subtotal
101
104
-3%
94
+7%
Grand Total
207
240
-14%
181
+14%
*Preliminary figures
The dollar value of the deals announced in the third quarter 2002 tripled to $68 billion from $16.6 billion in the second quarter 2002, propelled by Pfizer’s $60 billion acquisition of Pharmacia Corp. By virtue of this one deal, the health care industry ranks first among all sectors of the M&A market for 2002 with $92 billion spent to finance nearly 660 deals to date. The banking and finance industry ranks in second place with just one-third the dollars spent and one-third the number of deals announced.
“Even without the Pfizer-Pharmacia deal, the health care industry is maintaining its historical levels of M&A activity both in volume and in dollars spent. The Hospitals, Medical Devices and Pharmaceuticals sectors continue to garner the greatest amount of attention, and capital, from investors,” stated Sanford B. Steever, Ph.D., editor of the Report.
“Even when the overall economy lags, consumers tend to place health care services and products ahead of other purchases. This ensures that money will continue to flow into the industry and, consequently, that investors and dealmakers will continue to make it a primary focus ,” stated Stephen M. Monroe, Partner. “At current levels of activity, we predict that 2002 will close with approximately $100 billion funding nearly 850 deals in the health care industry,” added Mr. Monroe. “The dollar value of the deals announced will be one of the highest for health care in the past 10 years.”
For more information on the Health Care M&A Report, or for a subscription to any Irving Levin publications, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in New Canaan, 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.
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