Healthcare M&A for 2004

FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com
Health Care Merger And Acquisition Activity Strong In First Quarter Of 2006, According To Irving Levin Associates, Inc.
NORWALK, CT – April 18, 2006 – According to a new Report from Irving Levin Associates, a total of 221 mergers and acquisitions were announced in the health care industry during the first quarter of 2006. This figure is virtually level with the 223 deals announced in the prior quarter, Q4:05. Further, based on preliminary figures, a total of $39.3 billion was committed to fund this M&A activity.
The Health Care M&A Market
First Quarter 2006
Dollar Amounts By Sector*
Sector
Dollar Amount
First Quarter 2006
Percent of  Quarter
Long-Term Care
$     1,730,000,000
4%
Home Health Care
493,800,000
1%
Labs, MRI, Dialysis
466,750,000
1%
Managed Care
100,100,000
<1%
Hospitals
80,600,000
<1%
Physician Medical Groups
67,000,000
<1%
Behavioral Health Care
41,800,000
<1%
Rehabilitation
0
<1%
Other Services
1,450,000,000
4%
   Services subtotal
$     4,430,050,000
11%
Pharmaceuticals
$   26,300,000,000
67%
Medical Devices
6,760,000,000
17%
Biotechnology
1,450,000,000
4%
e-Health
365,000,000
<1%
   Technology subtotal
$   34,875,000,000
89%
 
 
 
Total health care
$   39,305,050,000
100%
*Preliminary figures
“As in recent quarters, the majority of M&A dollars—89% this quarter—were spent in the four health care technology sectors we cover: Biotechnology, e-Health, Medical Devices and Pharmaceuticals,” observed Stephen M. Monroe, Managing Editor at Irving Levin Associates. “The quarter produced four billion-dollar deals, worth a combined total of $26.8 billion, or 68% of the total amount committed during the quarter. All four were in the technology segment, with three in Pharmaceuticals and one in Medical Devices.”

“The Pharmaceutical sector saw strong M&A activity in the first quarter, particularly among specialty and niche companies in Europe, as mid-size companies seek to build the critical mass that will make them more competitive in an already competitive sector,” observed Sanford Steever, Ph.D., editor of the Report.

 

The Health Care M&A Market Q1:06 Deal Volume By Sector  
Sector
Q1:06
Deals*
Q4:05
Deals
%Change
Q1:05
Deals
%Change
Services:

 

 

Long-Term Care
26
40
-35%
28
-7%
Physician Medical Groups
14
7
+100%
12
+17%
Laboratories, MRI, Dialysis
11
7
+57%
10
+10%
Home Health
10
17
-41%
19
-47%
Hospitals
10
12
-17%
9
+11%
Managed Care
9
4
+125%
7
+29%
Behavioral Health
3
9
-67%
5
-40%
Rehabilitation
1
2
-50%
2
-50%
Other
32
29
+10%
34
-6%
Services Subtotal
116
127
-9%
126
-8%

Technology:

 

 

Pharmaceuticals
36
30
+20%
32
+12%
Medical Devices
34
28
+21%
43
-21%
Biotechnology
23
25
-8%
40
-43%
e-Health
12
13
-8%
22
-45%
Technology Subtotal
105
96
+9%
137
-23%

 

 


Grand Total
221
223
-1%
263
-16%
*Preliminary figures
 The health care services sectors generated greater deal volume than the technology sectors, but it was technology deals that captured the lion’s share of dollars committed to the health care M&A market. “Bayer’s $20 billion acquisition of Schering AG, proposed in March, indicates that the Pharmaceutical industry will continue to lead the health care M&A market. Among the service sectors, facility-based industries, such as Long-Term Care, will also see high levels of activity,” stated Mr. Monroe.
For more information on The Health Care M&A Report, or for a subscription to any Irving Levin publication, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has its headquarters in Norwalk, 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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