Health Care M&A For Second Quarter

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 M&A Dollars Keep Flowing In Second Quarter 2007 According To New Report From Irving Levin Associates, Inc.
NORWALK, CT – July 12, 2007 – According to a new Report from Irving Levin Associates, a total of 231 mergers and acquisitions were announced in the health care industry during the second quarter of 2007, a 3% increase over the 224 deals announced in the first quarter. Based on preliminary figures, a total of $59.1 billion was committed to fund the second quarter’s M&A activity, representing an 8% decrease from the $64.3 billion spent during Q1:07. However, the $123.4 billion spent in the first six months of 2007 represents a 10% increase over the $111.7 billion spent in the corresponding period of 2006.

The Health Care M&A Market Second Quarter 2007
Dollar Amounts By Sector*
Sector
Dollar Amount
First Quarter 2007
Percent of  Quarter
Labs, MRI, Dialysis
$ 2,100,000,000
4%
Managed Care
1,700,000,000
3%
Long-Term Care
1,100,000,000
2%
Hospitals
233,500,000
<1%
Home Health Care
173,000,000
<1%
Rehabilitation
              150,000,000
<1%
Behavioral Health Care
15,000,000
<1%
Physician Medical Groups
 0

Other Services
 5,000,000,000
8%
   Services subtotal
  $ 10,471,500,000
18%
Biotechnology
$ 23,500,000,000
40%
Medical Devices
13,900,000,000
24%
Pharmaceuticals
                      11,000,000,000
18%
e-Health
                           186,200,000
<1%
   Technology subtotal
                   $ 48,586,200,000
82%
Total health care
$ 59,057,700,000
100%
*Preliminary figures
The health care technology segment attracted the largest amount of capital, capturing roughly four dollars out of every five invested in health care M&A. The quarter also posted 10 billion-dollar deals across all sectors, worth a combined total of $43.6 billion, or nearly three-quarters of all M&A dollars in Q2:07.

The number of deals announced in each sector of the health care industry appears in the chart below, along with comparisons to the prior quarter (Q1:07) and the year-ago quarter (Q2:06).
The Health Care M&A Market Q2:07
Deal Volume By Sector 
Sector
Q2:07
Deals*
Q1:07
Deals
%
Change
Q2:06
Deals
%
Change
Services Segment:
 
 
 
 
 
Long-Term Care
23
35
-34%
27
-15%
Home Health Care
15
10
50%
18
-17%
Hospitals
15
10
50%
17
-12%
Labs, MRI, Dialysis
10
10
  0%
9
11%
Managed Care
9
5
80%
7
29%
Physician Groups
6
9
-33%
8
-25%
Rehabilitation
4
1
300%
1
300%
Behavioral Health
3
4
-25%
5
-40%
Other
22
  17
29%
35
-37%
   Services Subtotal
107
101
  6%
127
-16%
 
 
 
 
 
 
Technology Segment:
 
 
 
 
 
Medical Devices
40
39
3%
48
-17%
Biotechnology
36
35
3%
33
  9%
Pharmaceuticals
35
34
3%
39
-10%
e-Health
13
15
-13%
9
-55%
   Technology Subtotal
124
123
1%
149
-17%
Grand Total
231
224
 3%
276
-16%
*Preliminary figures
M&A activity in the Biotechnology sector continues to be driven by both big pharma firms and other biotech firms in search of new blockbuster drugs and technologies. “With advances on several scientific fronts, vaccines, once thought to be a low-margin business, are showing new potential and attracting heightened interest among strategic buyers,” stated Sanford Steever, Ph.D., editor of the Health Care M&A Report. “Biotechnologically sophisticated diagnostic systems and late-stage drug candidates also figure prominently in the biotech M&A market,” added Mr. Steever.

The Long-Term Care sector continues to generate the highest deal volume among the health care services sectors. “While strategic and financial investors continue to find good opportunities in the current market, valuations are showing some signs of leveling off in the seniors housing industry,” commented Stephen M. Monroe, managing editor at Irving Levin Associates.

“If M&A activity maintains the levels set in the first half of the year, 2007 will emerge as a record year in terms of dollars committed to the health care merger and acquisition market,” Mr. Steever summarized.

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 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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