THIRD QUARTER 2004 HEALTH
CARE M&A DOLLARS 11% HIGHER THAN LAST YEAR ACCORDING TO NEW REPORT FROM
IRVING LEVIN ASSOCIATES, INC.
NEW CANAAN, CT –OCTOBER 4, 2004 – During the third quarter
of 2004, M&A deal volume in the health care industry fell just 6% from the
previous quarter and 8% from the year–ago quarter, Q3:03. Based on revealed
prices, a total of $21 billion was spent to finance the third quarter’s 216
deals. While this represents an 18% drop from the $25.6 billion committed to
fund health care M&A in Q2:04, it is an 11% increase over the $19 billion
spent in the year-ago quarter.
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Pharmaceuticals captured the largest percentage of deal
volume (22%) and dollar amounts (47%) in Q3:04. “With big pharmas’ own
pipeline of new drugs dwindling, and generics nibbling at their heels,
searches for the next blockbuster are taking them more and more to
biotechnology companies, and drugs at earlier stages of development,” stated
Stephen M. Monroe, managing editor at Irving Levin Associates, Inc. “The
cost of acquiring a promising technology or drug platform from a biotech may
be cheaper than internal development.”
Within the services segment, the Hospital sector was particularly active,
attracting a total of $3.9 billion for the acquisition of 61 acute-care
hospitals. “Not only did Tenet Healthcare’s divestiture program impact the
M&A market, so too did the recapitalization of two medium-size hospital
managers,” observed Sanford Steever, Ph.D., editor of the Report. “These
deals were undertaken to provide these companies with capital for further
growth and to insulate them from the vagaries of the public markets.”
The first three quarters of 2004 have witnessed $140 billion being spent on
approximately 652 deals in the health care M&A market. “Despite the effect
of election jitters and oil prices on the economy during the fourth quarter,
this year may very well end with an estimated 850 deals at a combined value
of nearly $160 billion,” commented Mr. Monroe. “This level of activity
signals the amount of fragmentation still present in the health care
industry, and the opportunities available for further consolidation.”
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 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.
Click here to get more information or to order any of our
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