HEALTH CARE M&A DEAL VOLUME UP IN THIRD QUARTER 2003, ACCORDING TO NEW REPORT FROM IRVING LEVIN ASSOCIATES, INC.

NEW CANAAN, CT –October 21, 2003 – During the third quarter of 2003, M&A deal volume in the health care industry increased, reflecting a gradual improvement in the overall economy. A total of 230 deals were announced in 13 sectors, a 2% increase over the second quarter and a 10% increase from the third quarter of 2002.

The size of deals was virtually flat, however: Based on revealed prices, a total of $19.4 billion was spent to finance the third quarter’s 230 deals, up just 1.5% from the $19.1 billion spent in the second quarter to fund 226 transactions.

The Health Care M&A Market Q3:03 Deal Volume By Sector
Sector	Q3:03 Deals*	Q2:03 Deals	%Change	Q3:02 Deals	%Change
*Services:*
Long-Term Care	25	26	-4%	17	+47%
Hospitals	19	4	+375%	18	+6%
Laboratories	13	7	+86%	10	+30%
Managed Care	10	6	+67%	5	+100%
Home Health	4	4	0%	8	-50%
Rehabilitation	4	6	-33%	3	+33%
Physician Medical Groups	4	7	-43%	11	-64%
Behavioral Health	0	4	NM	1	NM
Other	35	26	+35%	38	-8%
Services Subtotal	114	90	+27%	111	+3%

*Technology:*
Medical Devices	36	45	-20%	41	-12%
Biotechnology	34	36	-6%	16	+112%
Pharmaceuticals	32	40	-20%	34	-6%
e-Health	14	15	-7%	8	+75%
Technology Subtotal	116	136	-15%	99	+17%

Grand Total	230	226	+2%	210	+10%
*Preliminary figures NM = Not Meaningful

Unlike in recent quarters, health care services deal volume nearly equaled that of medical technology deal volume. The health care services sectors surged from nearly 40% of deal volume last quarter to nearly 50% this quarter. The nine health care services sectors posted 114 deals, with medical technology picking up the remaining 116.

The most dramatic change in quarter-over-quarter M&A activity took place in the Hospital sector. Soaring 375% from four deals in Q2:03 to 19 deals in Q3:03, hospital mergers and acquisitions proceeded at a brisk pace. “What we’re seeing here is a return to the historical levels of deal volume,” said Stephen M. Monroe, managing editor at Irving Levin Associates, Inc., which publishes The Health Care M&A Report. “There were 18 deals announced in the third quarter of 2002 versus 19 this year. But the first six months of 2003 experienced a severe drought in hospital deals. It appears that drought is over.”

The top three sectors of the health care industry, Biotechnology, Medical Devices and Pharmaceuticals, accounted for 44% of all health care M&A deals announced in the second quarter. “There remains a lot of interest in pharma and medical device companies,” Sanford Steever, Ph.D., editor of the Report. “Year-to-date, Biotechnology has captured nearly 30% of all dollars invested in health care services. That’s not likely to change in the near future.” In contrast, the most active health care services sector, Long-Term Care, was responsible for just 4% of the dollars spent.

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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