In the April 2005 issue:
Health Care M&A Results for The First
Quarter of 2005
A total of 248 mergers and
acquisitions were announced in the first quarter of 2005, the highest
level in two years. Based on revealed prices, $34.8 billion was committed
to fund this M&A activity.
...
A Deal With Wrinkles
Medicis is paying $2.8 billion for breast implant manufacturer Inamed.
What impact will the FDA and FTC reviews have on this deal? Read inside.
...
The Month in Deals
The past four weeks have seen a total of 66 mergers and acquisitions
announced in the health care industry. While deal volume is split fairly
evenly between the services and technology segments, technology captured
over 95% of the dollars spent.
...
In The Departments
Deal Summaries
Additional Transactions
Transaction Updates
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Read more about
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Companies mentioned in this issue:
A
Abbott Laboratories p16
Affinity Health Ltd. p12
Alaska Bingo Supply p16
All Care Nursing Services p13
Allergan p4
Almost Family p10
Anam p10
Arakis Ltd. p14
Associated Administrators p13
Associated Radiation Oncologists, Inc. p12
ATC Healthcare p13
Athena Health Care Systems p13
B
Banta Corp. p16
Banta Healthcare Group p16
Baptist Heath System p12
Bartow Memorial Hospital p10
Bayer AG p16
Bayer Yakuhin Ltd. p16
Beaverton Dialysis Center p12
Behrman Capital p12
Benchmark Assisted Living p13
Bio-Rad Laboratories, Inc. p16
BioBalance Corporation p10
BioSource International p16
Boston Scientific p15
Brownsville General Hospital p10
C
CareDecision Corp. p15
Caretenders Visiting Nurse p10
Carilion Health System p10
CB Richard Ellis p13
Celgene p16
Cengent Therapeutics p14
Computer Sciences Corp. p15
Cordia Senior Living p13
CRC Health Group p4
Crdentia Corp. p13
CryoVascular Systems p16
CTI Molecular Imaging p15
CVC Asia Pacific Ltd. p12
D
Deutsche Bank p3
Diakon Lutheran Social Ministries p13
DST Systems p15
E
Emergis p15
EntreMed p16
Epimmune p14
Esoterix p12
F
Ferring Holding p16
Fidelity Capital p16
Florida Home Health p10
Fournier Pharma p16
G
GIC Special Investments Pte., Ltd. p12
Goldman, Sachs & Co. p15
Greenfield Partners, LLC p13
H
Hawaii Pacific Health p12
HCA p12
Health Management Associates p10
Health Plans Solutions p15
Healthcare Industry Professionals p13
HealthSouth p12
HealthSouth Medical Center p12
HealthTrans, LLC p15
Helping Hands Health Care p10
HemaCare Dialysis Center p12
Holiday Retirement Corp. p13
I
IDM, SA p14
ierra Tucson p4
Inamed p3
Inncardio p14
Ironbridge Capital Pty. p12
J
JPMorgan p3
K
Kaiser Permanente p12
L
Laboratory Corp. of America Holdings p12
LifePoint Hospitals p10
M
Manatee Memorial Hospital p10
Mease Health Care System p12
Medicis Pharmaceutical Corp. p3
Mid-Michigan Regional Dialysis p12
Mini-Mitter p16
Miraval p10
Moanalua Medical Center p12
Montclair Baptist Medical Center p12
Mortan Plant Hospital Association p12
N
National Home Health Care p10
NDCHealth Corporation p15
New Way Services p10
New York Health Care p10
NextHealth p10
North Castle Partners p10
Novartis p14
O
OnSource Corporation p16
Onward Healthcare p13
Oracle p15
Osmotics Pharma, Inc. p16
P
PeopleSoft p15
Province Healthcare p10
Q
Queen’s Medical Center p12
R
Radiation Therapy Services p12
Ramsay Health Care Ltd. p12
Raptor, LLC p16
Regence BlueCross BlueShield p13
Renal Care Group p12
ResCare p10
Respironics p16
Rothschild p16
Rubicon Medical Corporation p15
S
sanofi-aventis p2
Savient Pharmaceuticals p16
Serenity Services p10
Siebel Systems p15
Siemens AG p15
Siemens Medical Solutions p15
Solvay Pharmaceuticals p16
Sovereign Bank p13
St. Francis Healthcare System p12
St. Francis Medical Center p12
St. Francis Medical Center-West p12
T
Tandem Healthcare p13
Tenet Healthcare Corp. p2
TravMed USA p13
Triad Hospitals p12
Trivascular, Inc. p16
U
University of Alabama Health System p12
V
Vectura Group PLC p14
W
Wells Fargo Securities, LLC p16
Welsh, Carson, Anderson & Stowe p13
West Virginia University Hospital p12
Williamson Memorial Hospital p10
Wythe County Community Hospital p10 |
The
Health Care M&A Monthly
Health Care M&A Results for The First
Quarter of 2005
M erger
and acquisition activity in the health care industry reached its highest
level in two years during the first quarter of 2005, posting a total of
248 deals. This figure represents a 15% increase over the previous
quarter’s 216 deals and a 19% increase over the year-ago quarter’s 209
transactions. The last time volume was higher occurred in Q4:02, when a
total of 286 transactions were posted.
The contribution of each
sector to Q1:05’s deal volume appears below, where each sector is assigned
to either the health care services or the health care technology segment.
With 43
deals, Medical Devices finally overtook Pharmaceuticals as the single most
active sector in terms of deal volume. Both the Biotechnology and the
e-Health sectors scored notable gains over both the previous and the
year-ago quarters. This suggests that as both of these sectors move toward
overall profitability—the biotech industry, as a whole, could be
profitable within four years— investors may be positioning themselves by
buying companies they perceive to be bargains in the current market. In
any event, the three most active sectors in Q1:05, all of them in the
technology segment, accounted for 46% of the quarter’s total deal volume.
Among services, the
Long-Term Care sector enjoyed the highest volume, while the Hospital
sector took a hit, slipping 47% from the previous quarter. It appears that
the appetite for buying hospitals is moderating as the market continues to
digest all the facilities that Tenet Healthcare Corp. (NYSE: THC)
sold off over the past two years.
What They Paid
Based on prices revealed to
date, a total of $34.8 billion was committed to finance Q1:05’s 248
transactions. This represents a 33% drop from the previous quarter’s $51.7
billion and a 63% drop from Q1:04’s $92.9 billion. In perspective,
however, it should be recalled that Q1:04’s results were skewed upwards by
the $65.5 billion merger that gave rise to sanofi-aventis (NYSE:
SNY).
Though the health care
technology segment accounted for 54% of the deal volume in Q1:05, it
captured 87% of the funds spent on health care M&A. The dollar amount
spent in each sector is tabulated above while the percentage that each
sector contributed to the overall total appears in the chart opposite.
Six billion-dollar deals
were announced in Q1:05, totaling $24.6 billion and accounting for 71% of
the quarter’s total committed funds. Three were in Pharmaceuticals, two in
Medical Devices and one in Specialty Pharmacy (a part of "Other"
services).
These various figures show
that even though the median price paid per deal in Q1:05, $16,250,000,
fell from the 2004 median price of $17,320,000, increased deal volume
indicates that the number of participants in the M&A market has actually
grown.
|
|
Q1:05 |
Q4:04 |
% |
Q1:04 |
% |
|
Sector |
Deals* |
Deals |
Change |
Deals |
Change |
|
Services Segment: |
|
|
|
|
|
|
Long-Term
Care |
26 |
25 |
+4% |
13 |
+100% |
|
Home Health |
14 |
8 |
+75% |
6 |
+133% |
|
Physician
Medical Groups |
11 |
10 |
+10%
|
10 |
+10% |
|
Laboratories,
MRI, Dialysis |
10 |
10 |
0% |
6 |
+67% |
|
Hospitals |
9 |
17 |
-47% |
9 |
0% |
|
Managed Care |
7 |
10 |
-30% |
8 |
-13% |
|
Behavioral
Health |
5 |
1 |
+400% |
4 |
+25% |
|
Rehabilitation |
2 |
1 |
+100% |
6 |
-67% |
|
Other |
29 |
29 |
0% |
27 |
+7% |
|
Services Subtotal |
113 |
111 |
+2% |
89 |
+27% |
|
Technology Segment: |
|
|
|
|
|
|
Medical
Devices |
43 |
33 |
+30% |
37 |
+16% |
|
Biotechnology |
39 |
22 |
+77% |
29 |
+34% |
|
Pharmaceuticals |
31 |
37 |
-16% |
39 |
-21% |
|
e-Health |
22
|
13
|
+69% |
15 |
+47% |
|
Technology Subtotal |
135 |
105 |
+29% |
120 |
+13% |
|
Grand Total |
248 |
216 |
+15% |
209 |
+19% |
*Preliminary figures |
|
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