HEALTH CARE M&A MARKET REACHES HIGHEST LEVEL SINCE THE FOURTH QUARTER OF 2000 According to Irving Levin Associates, Inc.

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 REACHES HIGHEST LEVEL SINCE THE FOURTH QUARTER OF 2000 According to Irving Levin Associates, Inc.
NEW CANAAN, CT -July 26, 2002 - A total of 238 deals were announced in 13 sectors of the health care industry, a 15% increase over the 207 deals announced in the first quarter of 2002 and a 12% increase over the 213 deals of the second quarter of 2001. In perspective, the health care M&A market has reached its highest level since the fourth quarter of 2000.
The Health Care M&A Market Q2:02 Deal Volume By Sector  
Sector
Q2:02
Deals*
Q1:02
Deals
%Change
Q2:01
Deals
%Change
Services:

 

 

Long-Term Care
20
12
+67%
10
+100%
Home Health
17
2
+750%
11
+55%
Managed Care
15
7
+114%
13
+15%
Hospitals
13
17
-24%
18
-28%
Laboratories
13
10
+30%
19
-32%
Physician Medical Groups
10
9
+11%
9
+11%
Behavioral Health
4
2
+100%
4
0%
Rehabilitation
2
1
+100%
4
-50%
Other
39
24
+63%
30
+30%
Services Subtotal
133
84
+58%
118
+13%

Technology:

 

 

Medical Devices
36
52
-31%
29
+24%
Pharmaceuticals
26
28
-7%
20
+30%
Biotechnology
23
29
-21%
21
+10%
e-Health
20
14
+43%
25
-20%
Technology Subtotal
105
123
-15%
95
+11%

 

 


Grand Total
238
207
+15%
213
+12%
*Preliminary figures
The dollar value of the deals announced in the second quarter 2002 rose 96% to $15.6 billion from $7.9 billion in the first quarter 2002, with health care services capturing $9.6 million, or 62% of the total. Reversing the trend of the past several quarters, the health care services segment accounted for a greater share of both the deal volume and the dollars expended in the second quarter than did the health care technology segment. 
"With new reimbursement protocols in place, several sectors of the health care services industry, such as Home Health, have turned their attention and energies to growing through acquisition. And with double-digit premium increases almost assured, companies in the Managed Care sector will also be able to focus their resources on getting deals done," stated Sanford B. Steever, Ph.D., editor of the Report
"Despite the large share that the health care services industry captured this quarter, in the near term, the M&A market is likely to be dominated by technology companies, particularly the Pharmaceutical sector," predicted Stephen M. Monroe, Partner.  In addition, "The recently proposed acquisition of Pharmacia by Pfizer for $60 billion, dwarfing the $23.5 billion already spent in the first half of the year on 445 deals, will overshadow the market this year and, perhaps, spawn some other mega-deals," stated 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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