In the October 2007
issue:
Third Quarter 2007 M&A Results--
A Total Of 245 Deals Posted Worth $48.0 Billion
The third quarter of 2007 posted a total of
245 mergers and acquisitions in the health care industry, in keeping with
previous periods.
A total of $48.0 billion was committed to fund the third quarter’s M&A
activity.
The first three quarters of this year have already established 2007 as the
second-largest ever in terms of M&A dollar volume.
...
September’s M&A
Market--
Seventy Deals Announced Worth $5.4 Billion
September’s health care M&A market
saw the announcement of 70 transactions worth $5.4 billion.
While large private equity deals were absent from the market, strategic
buyers negotiated a healthy volume of transactions.
...
In the Departments
Services
-Deal Summaries
-Additional Transactions
-Transaction Updates
Technology
-Health Care
Technology
-Deal Summaries
-Additional
Transactions
-Transaction Updates
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Articles Archive
Companies Mentioned in this issue:
October 2007
A
Abbott Molecular p14
Adnexus Therapeutics p16
Aerocare Holdings p4
Air Liquide Group p7
Allergan p16
Allied Healthcare International p7
Amerigroup p9
Andventure p4
Antigen Laboratories p15
APEX International Clinical Research p10
Arcadia Resources p4
Array BioPharma p16
Ascension Health p8
Astra Tech p15
AstraZeneca p15
Atlantis Components p15
Atria Genetics p14
B
Bain Capital p4
Bank of America, N.A. p9
Banner Health p7
Barberton Citizens Hospital p7
Bellevue Woman’s Hospital p7
Berkeley HeartLab p15
Betapharm p16
Bristol-Myers Squibb p16
C
Caritas Christi Health Care p8
Carolinas HealthCare System p7
Catholic Health East p8
Catholic Health Initiatives p8
Celera Group p14
Celgene Corporation p15
Cleveland Clinic Foundation p7
Community Health Systems p7
Concateno Plc p15
Cowan and Company, LLC p10
Cozart p15
CRC Health Corporation p4
D
DaVita p10
Dechert p16
Deutsche Bank p15
Dr. Reddy’s Laboratories p16
E
Ellis Hospital p7
Emeritus Assisted Living p9
Eppendorf p15
Esprit Pharma p16
EuroConsult, Inc. p15
Evotec AG p10
Exceptional Children’s Foundation p4
F
Fairfax Anesthesiology Associates p9
G
Goldman Sachs p3
Good Samaritan Regional Medical Center, p8
Greater Southeast Community Hospital p8
H
Hackley Hospital p7
HomeChoice Partners p10
Humana p9
I
Inova Fairfax Hospital p10
Inova Health Systems p10
Isis Pharmaceuticals p10
J
Johnson & Johnson p10
K
Kayne Eras Center p4
KMG America p9
L
Lehman Brothers, Inc. p10
Links2Care p4
Loving Care Agency p4
M
McLaren Health Care Corp. p7
Memphis Managed Care Corp. p9
Mercy General Health Partners p7
MidSouth Health Solutions p9
MPM Bio IV NVS Strategic Fund, LP p16
MTS Health Investors p4
N
New Brunswick Scientific p15
Nile Therapeutics p10
North Oakland Medical Centers p7
Novant Health p7
Novartis AG p16
O
Oaktree Capital Management p4
Ortho-McNeil p10
P
Par Pharmaceutical Co. p16
PAREXEL International Corp. p10
Pediatrix Medical Group p9
Planet Technologies p14
POH Medical Center p7
Polymed p15
Pottsville Hospital and Warne Clinic p8
PriceWaterhouseCoopers p16
Primedex Health Systems p8
R
Radiation Therapy Services p8
Radius Health p16
RadNet Therapy Services p8
Raxbaxy Laboratories p16
Red Mortgage Capital p9
Renovis p10
River West Medical Center p7
Roche AG p16
Rowan Regional Medical Center p7
S
Shiloh Health Services p7
SMI Products p10
Specialty Hospitals of America p8
St. Clare’s Hospital p7
Structure House p4
Summa Health System p7
Sun Health p7
Sun Health Foundation p7
Sun Health Properties p7
Sun Pharmaceutical Industries p16
Symphony GenIsis p10
T
Taro p16
TLC Family Care Health Plan p9
Triad p7
Trinity Health p7
V
Valley Imaging Centers p8
Ventana Medical Systems p16
Z
Zenotech p16 |
Third Quarter 2007 M&A Results--
A Total Of 245 Deals Posted Worth $48.0 Billion
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Based on preliminary figures, a total of 245
mergers and acquisitions were announced in the health care industry during
the third quarter of 2007. This figure represents a tiny 1% increase over
the 242 transactions announced in the previous quarter, Q2:07, and a
negligible 3% decrease from the 252 deals announced in the year-ago
quarter, Q3:06.
The four sectors of the health care technology segment, including
Biotechnology, e-Health, Medical Devices and Pharmaceuticals, posted a
combined total of 128 deals, or 52% of the quarter’s total amount. This
number is in line with the previous quarter’s 54% figure, but a departure
from the year-ago quarter when the technology segment captured just 40% of
total deal volume. The nine sectors of the health care services segment
generated the remaining 117 mergers and acquisitions during the third
quarter of 2007. The contribution of each sector to the quarter’s deal
volume, along with comparisons to the previous and year-ago quarters,
appears in the table on page 4 of the
October issue of The Health Care M&A Monthly.
Among the individual sectors, Pharmaceuticals posted 51 transactions
during Q3:07, followed by Medical Devices with 41 and Long-Term Care with
28. These three sectors combined accounted for 49% of all M&A activity in
the health care industry. At the other end of the scale, Rehabilitation
produced just four deals and Behavioral Health Care posted just three.
According to prices revealed to date, a total of $48.0 billion was
committed in Q3:07 to fund the quarter’s health care M&A activity. This
represents a 21% decrease from the $60.6 billion committed in Q2:07 and a
35% decrease from the $74.2 billion spent in Q3:06.
The technology segment posted $32.2 billion (67% of the total); the
services segment, $15.8 billion (33%). Medical Devices made the largest
contribution of any individual sector with $16.8 billion, followed by
Pharmaceuticals with $11.3 billion and Long-Term Care with $8.9 billion.
The percentage contribution of each sector to the $48.0 billion total
appears in the chart on page 3 of this
month's issue. Due to the low level of their
figures, the results of four sectors were aggregated: Behavioral Health
Care, e-Health, Physician Medical Groups and Rehabilitation.
The third quarter produced 12 billion-dollar deals worth a combined total
of $31.0 billion, or 65% of the total amount for Q3:07.
Year-To-Date
During the first three quarters of 2007, a total of 722 deals were
announced in the health care industry worth a combined total of $173.0
billion. From where we stand, it now seems unlikely that this year’s
dollar amount will surpass the record-breaking $267.1 billion reached in
2006, but then as a matter of common sense not every year can be a
record-breaker. As noted in September’s issue, 2007 is already the
second-largest year ever recorded in terms of dollar volume. And we expect
the fourth quarter unfolding before us to contribute more to the overall
total.
What we do not expect to happen is for the health care M&A market to seize
up or go under. Datatracker Dealogic has observed that May produced
the highest amount of M&A activity in 2007, 765 deals in all sectors of
the economy, as compared with just 446 in September. Our figures for the
health care industry show that 67 deals were posted in May 2007, and 70 in
September 2007. Health care, then, appears to be holding its own and
accounting for a proportionately higher share of the total M&A market,
rising from 9% of the overall market in May to 17% in September. The
reasons are not hard to see. Health care is still growing as a percentage
of GDP and is not as susceptible to issues of cyclicity as other sectors
of the economy. The demand for health care services and products from an
aging population continues to rise. And the industry remains fragmented,
inviting further consolidation to gain market share and operating
efficiencies.
What we are not currently seeing, though, are the spectacular private
equity deals that had occupied so many headlines during the first half of
the year. Still, private equity was not altogether absent from the third
quarter’s activity: seven deals, worth a combined total of $7.4 billion,
had private equity groups as their buyers, three in July, three in August
and one in September. We believe that the large players, the Goldman
Sachs of the world and the like, will now look to the middle market as
a source of deals more avidly than in the past. They will also likely
pursue many middle-size deals rather than make one grand gesture. And they
may content themselves with buying an interest in a company rather than
its entirety. But as the dust settles, it must be recalled that the great
majority of buyers in the health care M&A market have been strategic, not
financial, and that they remain well motivated to make deals.
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