Stephen M. Monroe, Partner
Sanford B. Steever, Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com
Despite First Quarter Decline, Health Care M&A Remains Robust, According to
New Report From Irving Levin Associates, Inc.
NORWALK, CT – April 15, 2008 – 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 2008, a 27% decline from the 301 deals announced in the prior
quarter. Based on preliminary figures, a total of $27.3 billion was
committed to fund the first quarter’s M&A activity, representing a 50%
decrease from the $54.6 billion spent during Q4:07. Even so, the health care
merger and acquisition market remains strong relative to historical levels
during the past five years and relative to the recent turmoil in the
financial markets.
The Health Care M&A Market First Quarter 2008
Dollar Amounts By Sector*
Sector
Dollar Amount
First
Quarter 2007
Percent of Quarter
Home Health Care
$
1,090,000,000
4%
Hospitals
376,200,000
1%
Long-Term Care
372,314,000
1%
Managed Care
355,500,000
1%
Physician Medical Groups
98,600,000
<1%
Labs, MRI, Dialysis
22,841,000
<1%
Rehabilitation
6,300,000
<1%
Behavioral Health Care
0
—
Other Services
2,328,100,000
9%
Services subtotal
$
4,649,855,000
17%
Medical Devices
$
7,055,230,000
26%
Biotechnology
6,846,451,000
25%
Pharmaceuticals
5,986,360,000
22%
e-Health
2,761,890,000
10%
Technology subtotal
$22,649,931,000
83%
Total health care
$27,299,786,000
100%
*Preliminary Figures
The health care technology segment attracted
the largest amount of capital, capturing over four dollars out of every five
invested in health care M&A. The quarter also posted eight billion-dollar
deals, primarily in technology sectors, worth a combined total of $14.8
billion, or 54% of all M&A dollars in Q1:08.
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
(Q4:07) and the year-ago quarter (Q1:07).
The Health Care M&A Market Q1:08 – Deal Volume By SectoR
Grand Total
221 301 -27% 237 -7% *Preliminary Figures
These results clearly point to the fact that
the M&A market in early 2008 has declined from the record-setting peaks of
activity set in 2006 and 2007. “After two record-breaking years, both deal
and dollar volume in the health care M&A market have slackened,” stated
Sanford Steever, Ph.D., editor of The Health Care M&A Report. “While not
every year can be expected to shatter existing records, 2008 still promises
to have one of the stronger showings in the past five years, particularly in
the area of technology-oriented sectors,” added Mr. Steever.
The Health Care industry is continuing to attract interest from potential
deal makers. “We all know that borrowing has become more difficult, that
real estate has become more illiquid and that financial buyers are largely
sitting on the sidelines,” commented Stephen M. Monroe, managing editor at
Irving Levin Associates. “But we also know that the health care industry is
about as close to anti-cyclic as you can get, that the industry remains
fragmented and ripe for consolidation and that money is still available for
deal making. Companies still want to grow, and they will pursue deals if
that advances their strategic goals.”
“The ups and downs in the financial markets have by no means brought the M&A
market to a halt; they have, however, redefined the opportunities the market
makes available,” Mr. Steever summarized. “Now that the stock market has
sloughed off the ‘acquisition premium’ that had kept it high, a number of
well-run companies are attractively priced—but probably not for too long.”
For more information on The Health Care M&A Information Service, The Health
Care Acquisition Report or for a subscription to any Irving Levin
publication, 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 and venture capital databases, on the
health care and senior housing markets.
Since 1948, Irving
Levin Associates, Inc. has been the leading source of information
and investment research on mergers and acquisitions in the
Behavioral Health Care, Biotech, e-Health, Home Health Care,
Hospitals, Laboratories, MRI and Dialysis, Long Term Care, Managed
Care, Medical Devices, Pharmaceuticals, Physician Medical Groups,
Rehabilitation and other health care markets.
