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 October
2008 issue
M&A Meets The Credit Crunch--
Turmoil in Market Sparks Creativity to Get Deals Done
Turmoil in the capital markets has
made itself felt throughout the economy and markets, including the health
care M&A market.
Read here to see what particular financial challenges are facing the M&A
market and how dealmakers are responding to them.
...
Third Quarter 2008 M&A Results--
251 Deals Announced Worth $88.7 Billion
The health care industry announced 251 mergers and acquisitions in the third
quarter of 2008. Based on revealed prices, a total of $88.7 billion was
committed to finance these deals.
Preliminary results show that despite contracted credit, 2008 is set to rank
among the top three years for health care M&A.
...
In the Departments
Services
-Health Care Services
-Deal Summaries
-Additional Transactions
-Transaction Updates
Technology
-Health Care Technology
-Deal Summaries
-Additional Transactions
-Transaction Updates
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Read more about
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Articles Archive
Companies Mentioned in this issue:
October 2008
A
Abington Memorial Hospital p4
Adventist Health p4
Agfa-Gaevert p15
Allscripts Healthcare p9
Alpharma p16
Amedisys p3
AOL p10
Applied Biosystems p9
ARCA biopharma p9
Arcapita p7
Asante Partners p10
B
Ball Memorial Hospital p4
Bank of America, NA p4
Blackford Community Hospital p4
Bristol-Myers Squibb p16
BTG Plc p10
C
Cambridge Realty Capital Companies p1
Canton-Inwood Memorial Hospital p4
Cape Fear Valley Health System p3
Cardinal Health p10
Cardinal Health System p4
Cellzome AG p9
Center for Molecular Medicine p4
Central Montgomery Medical Center p4
Charles River Laboratories International p8
CIT Healthcare p4
Clarian Health p4
Clarix, LLC p8
Covington Associates p8
Critical Homecare Solutions p3
CryoCath Technologies p10
D
Daiichi Sankyo p16
Datascope Corporation p10
Dental Art Laboratories p4
E
Eli Lilly & Co. p16
Everyday Health p10
G
Getinge AB p10
GlaxoSmithKline p9, p16
Goldman Sachs p15
Governor and Company of the Bank of Ireland p9
H
Harris Williams & Co. p10
Health Care REIT p7
Holisticare, LLC p2
Home Health Corporation of America p3
HSBC Bank PLC p9
I
ImClone p16
Invitrogen Corp. p9
J
Jackson County Board of Health p3
Jefferies Finance LLC p3
K
Keating Investments p9
King Pharmaceuticals p16
Kowa Co. p16
L
Lazard p15
Lehman Brothers p9
Lehman Brothers Finance, SA p16
LHCG Group p3
L’Oreal p16
M
Marketing Technology Solutions p10
MBF Healthcare Acquisition Corp. p3
Medicalodges p7
Medivation p15
MedSystems p10
Medtronic p10
Michael Reese Hospital p4
MIR Clinical Services p8
Misys Healthcare p9
Molecular Imaging Research, Inc. p8
Mountaineer Home Health p3
N
National Dentex p4
Novacea p9
Nuvelo p9
O
Oxford BioMedica Plc p10
P
Perseus, LLC p14
Pfizer p15
Pharsight Corporation p8
Phase Forward p8
Pioneer Behavioral Health p8
Pivotal Research Centers p8
Protherics PLC p10
Q
QualityHealth.com p10
Quest Diagnostics p16
R
Ranbaxy Laboratories p16
Reliant Technologies p15
RevolutionHealth Network p10
Rothschild p10
Royal Bank of Scotland PLC p9
S
Sanford Health p4
sanofi-aventis p16
Schering-Plough p9
Sciele Pharma p15
Senior Living Investment Brokerage p8
Sequenom p4
Shionogi & Co. Ltd. p15
Skilled Healthcare Group p7
SolAmor Hospice Corporation p2
South Coast Medical Center p4
Spectrum Health p4
Stifel Nicolaus p4
SummitRidge Hospital p2
Sun Healthcare Group p2
Sun Pharmaceutical Industries p16
Sunrise Senior Living p7
T
Taro Pharmaceutical Industries p16
Teva Pharmaceutical p16
Teva-Kowa Pharma p16
Thermage p15
Thomas Weisel Partners, LLC p8
Total p16
Transept Pharmaceuticals p9
Tripos International p8
U
UBS Investment Bank p15
Universal Health Services p2
V
ValueAct Capital p9
Van Andel Research Institute p4
Vector Capital p8
Viasys Healthcare p10
Vintage Park p7
W
Waterfront Media p10
West Tennessee Healthcare p3
Z
Zentiva p16
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Third Quarter 2008 M&A Results--
251 Deals Announced Worth $88.7 Billion
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During the third quarter of 2008, the health
care industry posted a total of 251 mergers and acquisitions. This
represents an 8% decline from the 274 deals in the previous quarter and a
9% decline from the 277 deals in the year-ago quarter, Q3:07. The four
sectors of the health care technology segment posted 137 deals, or 55% of
the total deal volume, while the nine sectors of the corresponding
services segment posted the remaining 114 transactions.
Three sectors combined, Medical Devices, Biotechnology and
Pharmaceuticals, accounted for 47% of the deal volume in the third
quarter. By contrast, four services sectors, Physician Medical Groups,
Rehabilitation, Behavioral Health Care and Managed Care, posted results in
single digits. Each sector’s contribution to third quarter deal volume,
along with comparisons to the previous and year-ago quarters, appears in
the table on page 3 of the
October issue of The Health Care M&A Monthly.
Based on prices revealed to date, a total of $88.7 billion
was committed to fund those 251 deals. This figure represents a 3%
increase over the $86.2 billion in the previous quarter and a 78% increase
over the $49.9 billion in the year-ago quarter. Biotechnology posted the
largest amount of any single sector, with $56.0 billion, or 63.2% of the
quarter’s total amount. It was followed by Pharmaceuticals, with $22.3
billion (25.2%) and "Other" Services with $3.8 billion (4.3%). The
normally stalwart and dependable Medical Device sector generated just $3.3
billion (3.8%). The contribution of each sector to the quarter’s total
dollar volume appears in the
chart on page 15 of the October issue of The Health Care M&A
Monthly. However, due to meager results, four sectors were aggregated:
Home Health Care, Laboratories, Physician Medical Groups and
Rehabilitation.
Of the third quarter’s dollar volume, $82.1 billion, or
93% of the quarter’s total amount, came from the technology segment, with
the services segment accounting for the remaining $6.6 billion (7%). There
were nine billion-dollar deals announced during the quarter, totaling
$73.0 billion. Among the 20 largest deals of Q3:08, a total of $74.9
billion was spent by foreign buyers and $5.8 billion by domestic buyers.
As noted in our August issue, foreign buyers have been taking advantage of
the acquisition opportunities presented by a historically low dollar.
While financial buyers, such as private equity firms and
REITs, were present in the market, strategic buyers clearly dominated
health care M&A activity in the third quarter. The few financial buyers in
the market announced just 11 acquisitions worth a combined total of $1.2
billion; strategic buyers were responsible for everything else.
These figures may offer some perspective on the health
care M&A market in the context of the credit crunch, now a year in the
making. In discussing the economic turmoil buffeting the markets, pundits
have often organized their stories around themes drawn from fairy tales;
the two most frequently quoted seem to be "Chicken Little" and "The
Emperor’s New Clothes." But the numbers tell a different story. Even if we
ignored any activity after the end of September, this year would still
rank as the third most active year in terms of dollar volume, with $202.9
billion, after 2006 ($268.4 billion) and 2007 ($226.5 billion). With
numbers as robust as these, investors and dealmakers appear to be
broadcasting to the rest of us their confidence in a sound health care M&A
market.
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