The Health Care M&A Monthly APR 2004

	The Health Care M&A Monthly
In the April 2004 issue: Health Care M&A Results for The First Quarter of 2004 A total of 198 deals were announced during Q1:04. Based on revealed prices, up to $86.2 billion was committed to finance this M&A activity. ... WCAS To Take US Oncology Private Welsh, Carson, Anderson & Stowe plans to take cancer provider US Oncology private in a $1.7 billion deal. ... The Month in Deals Based on revealed prices, a total of $11.6 billion was spent in the past four weeks to finance 71 transactions. ... 2003 Hospital Market Although hospital M&A volume declined in 2003 from 2002, pricing remained close to historical limits. ... In The Departments Deal Summaries Additional Transactions Transaction Updates Sign up for a trial subscription and get the current issue! Read more about The Health Care M&A Monthly. Read the past headlines.	Health Care M&A Results for The First Quarter of 2004 Preliminary results are in the for the first quarter health care merger and acquisition market. Based on publicly announced deals, a total of 198 transactions were reported in Q1:04 in 13 sectors of health care. Although this represents a 15% drop from the 234 deals announced in the previous quarter, financial indicators discussed below suggest that the M&A market, particularly for the health care technology segment, remains a healthy, growing one. Deal Volume Each sector’s contribution to overall deal volume is presented in the table below and compared with levels of activity in the prior and year-ago quarters. Only four sectors, Biotechnology, Home Health, Managed Care and Rehabilitation, posted increases over the prior quarter’s figures. Another three, Behavioral Health, e-Health and Physician Medical Groups, registered no change in deal volume quarter over quarter. The general decline in activity was greater in the services segment than the technology segment. The most precipitous drops occurred in the Hospital and Long-Term Care sectors, two of the mainstays of the services segment, which were down 55% and 56%, respectively. Nevertheless, both sectors are expected to pick up steam later in the year. As in recent quarters, the three most active sectors in the M&A market remain Pharmaceuticals, Medical Devices and Biotechnology. What They Paid Based on prices revealed to date, a total of $86.2 billion was committed to fund the first quarter’s 198 deals, which is nearly 93% of the $92.85 billion spent in all four quarters of 2003. True, fully $60.7 billion of that amount may be attributed to Sanofi-Synthelabo’s (NYSE: SNY) hostile takeover bid for Aventis, SA (NYSE: AVE). Even if we omit that one deal, the total spent during the quarter comes in at a very healthy $25.5 billion, which is 10% above last year’s quarterly average of $23.2 billion. The two charts on the facing page show the percentage contribution of each sector to the total amount committed to finance the first quarter’s M&A activity. The first chart includes the Sanofi-Aventis deal, the second omits it. In both, results from the Home Health and Rehabilitation sectors have been aggregated due to their small size. A total of seven billion-dollar deals were announced in Q1:04. By comparison, a total of 13 billion-dollar deals were announced in all of 2003. Three were in Pharmaceuticals, two in Medical Devices, one in Physician Medical Groups and one in Biotechnology. These seven accounted for $77.36 billion, or 90% of the total. Without the Sanofi-Aventis deal, the six remaining blockbuster deals would total $16.7 billion, or 66% of the quarter’s adjusted total.
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