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 MARKET FLOW OF DEALS REMAINS STEADY DEAL VALUE TOTALS $7.9 BILLION According to Irving Levin Associates, Inc.
NEW CANAAN, CT -April 25, 2002 – A total of 201 deals were announced in 13 sectors of the health care industry, representing a 4% decline from the prior quarter and a 3% decrease from the corresponding year-ago quarter. Deal volume in the health care M&A market thus appears to have remained steady, according to Irving Levin Associates, Inc. in its first quarter, 2002 Health Care M&A Report.
The Health Care M&A Market Q1:02 Deal Volume By Sector
Sector
Q1:02
Deals*
Q4:01
Deals
%Change
Q1:01
Deals
%Change
Services:
Hospitals
17
27
-37%
21
-19%
Long-Term Care
11
10
-52%
9
+11%
Laboratories
9
11
-18%
23
-61%
Physician Medical Groups
7
5
+40%
17
-59%
Managed Care
7
6
+17%
7
0%
Home Health
2
2
0%
8
-75%
Rehabilitation
1
3
-67%
5
-80%
Behavioral Health
1
2
-50%
4
-75%
Other
23
32
-28%
25
-8%
Services Subtotal
77
109
-29%
119
-35%
Technology:
Medical Devices
51
25
+104%
41
+24%
Biotechnology
30
28
+7%
11
+173%
Pharmaceuticals
29
27
+7%
13
+123%
e-Health
14
21
-33%
24
-42%
Technology Subtotal
124
101
+23%
89
+39%
Grand Total
201
210
-4%
208
-3%
*Preliminary figures
The dollar value of the deals announced in the first quarter 2002 dropped to $7.9 billion from $27.4 billion in the fourth quarter 2001, but was equal to the $7.9 billion spent during the third quarter 2001. Of the first quarter 2002 total expenditure, approximately 70% was in the health care technology segment, with the Pharmaceutical and Biotechnology sectors accounting for half of every dollar spent. Hospitals, Laboratories and Long-Term Care combined accounted for 15% of the total amount spent during first quarter 2002.
“As an indication of where investor interest currently lies, the three largest deals, all with price tags between $500 million and $1 billion, were in the Biotechnology and Pharmaceutical sectors,” stated Sanford B. Steever, Ph.D., editor of the Report. By contrast, the largest transaction in the services segment, with a price of $500 million, took place in the Laboratories sector.
“We expect that, going forward, the Biotechnology, Medical Device and Pharmaceutical sectors will continue to dominate the health care M&A market in terms of deal volume and the ability to secure financing,” noted Stephen M. Monroe, Partner. In addition, “This activity, along with a steady stream of acquisitions in the Hospital and Long-Term Care sectors, should give rise to an annual deal volume of between 800 and 850 deals in the health care M&A market,” continued Mr. Monroe.
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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