Health Care Merger And Acquisition Activity Soars In Second Quarter 2006, According To Irving Levin Associates, Inc.

NORWALK, CT – July 13, 2006 – According to a new Report from Irving Levin Associates, a total of 263 mergers and acquisitions were announced in the health care industry during the second quarter of 2006. This figure marks an 11% increase over the 236 deals announced in the prior quarter, Q1:06. Based on preliminary figures, a total of $66.9 billion was committed to fund this M&A activity.

The Health Care M&A Market Second Quarter 2006 Dollar Amounts By Sector*
Sector	Dollar Amount First Quarter 2006	Percent of Quarter
Long-Term Care	$ 8,645,300,000	13%
Hospitals	532,200,000	1%
Managed Care	417,500,000	<1%
Behavioral Health Care	250,000,000	<1%
Labs, MRI, Dialysis	202,800,000	<1%
Physician Medical Groups	115,800,000	<1%
Rehabilitation	101,500,000	<1%
Home Health Care	30,200,000	<1%
Other Services	1,239,100,000	2%
Services subtotal	$ 11,534,400,000	17%

Medical Devices	$ 28,077,500,000	42%
Pharmaceuticals	22,372,700,000	33%
Biotechnology	4,740,000,000	7%
e-Health	228,200,000	<1%
Technology subtotal	$ 55,418,400,000	83%

Total health care	$ 66,952,800,000	83%
*Preliminary figures

“As expected, the majority of M&A dollars—83% in the second 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 13 billion-dollar deals, at the remarkable rate of one each week, worth a combined total of $54.2 billion, or 81% of the total amount committed during the quarter. Three were in the Long-Term Care sector, with the remaining 10 in the technology segment, with six in Medical Devices, two in Biotechnology and two in Pharmaceuticals.”

“The Medical Device sector witnessed concerted M&A activity among diagnostics-oriented businesses while the Pharmaceutical sector saw strong activity targeting consumer health and generic drug businesses,” observed Sanford Steever, Ph.D., editor of the Report.

The Health Care M&A Market Q2:06 Deal Volume By Sector
Sector	Q2:06 Deals*	Q1:06 Deals	%Change	Q2:05 Deals	%Change
*Services:*
Long-Term Care	22	34	-35%	32	-31%
Home Health	17	11	+54%	16	+6%
Hospitals	13	10	+30%	14	-7%
Laboratories, MRI, Dialysis	9	12	-25%	14	-36%
Physician Medical Groups	8	14	-43%	8	0%
Managed Care	6	9	-33%	6	0%
Behavioral Health	4	3	+33%	5	-20%
Rehabilitation	1	1	0%	5	-80%
Other	36	34	+6%	29	+24%
Services Subtotal	116	128	-9%	129	-10%

*Technology:*
Medical Devices	46	35	+31%	37	+24%
Pharmaceuticals	39	37	+5%	25	+56%
Biotechnology	33	24	+38%	26	+27%
e-Health	29	12	+142%	11	+164%
Technology Subtotal	147	108	+36%	99	+48%

Grand Total	263	236	+11%	228	+15%
*Preliminary figures

The first half of 2006 has seen 500 deals announced in the health care industry worth a combined total of $108.1 billion. “With a robust first half of the year, we feel confident that 2006 will be among the most active years ever recorded in health care M&A. While the technology segment will lead this, facility-based industries in the services segment will also make a significant contribution,” 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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