Health Care M&A Deal Volume and Value Both Slowed in Q2: 2015, According to Health Care M&A News

IMMEDIATE RELEASE  
Lisa E. Phillips, Editor
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NORWALK, CT – July 28, 2015 – Health care merger and acquisition activity dropped by 13% in the second quarter of 2015, compared with the first quarter of the year. Deal volume in the second quarter slipped to 315 transactions, from 361 in the previous quarter. The combined spending total in the second quarter was just $54.2 billion, a decrease of 49% compared with the $106.1 billion spent in the previous quarter, according to Health Care M&A News.

                        The Health Care M&A Market – Deal Volume by Sector

 

Q2:15

Q1:15

 

Q2:14

 

Sector
Services

Deals

Deals

%
Changed

Deals

%
Changed

Behavioral Health Care

5

8

38%

7

-29%

Home Health & Hospice

5

16

-69%

16

-69%

Hospitals

23

23

0%

24

-4%

Laboratories, MRI & Dialysis

11

4

175%

7

57%

Long-Term Care

64

70

-9%

62

3%

Managed Care

7

10

-30%

8

-13%

Physician Medical Groups

22

22

0%

16

38%

Rehabilitation

6

8

-25%

6

0%

Other

38

48

-21%

33

15%

     Services subtotal

181

202

-13

179

1%

Technology

 

 

 

 

 

Biotechnology

34

60

-43%

35

-3%

eHealth

33

26

27%

30

10%

Medical Devices

29

23

26%

31

-6%

Pharmaceuticals

38

43

-12%

50

-24%

      Technology subtotal

134

152

-12%

146

-8%

Grand Total

315

361

-13%

325

-3%

Source: The Health Care M&A Report, July 2015

Health care services represented 57% of the second quarter’s transactions, roughly equal to the previous quarter (58%), but higher than the same quarter in 2014 (55%). Still, the 181 deals represented a 13% decline compared with the previous quarter (209 deals). Six of the nine services sectors posted a decrease in deal volume and two remained unchanged. Only the Laboratories, MRI & Dialysis sector showed a gain deal-making activity.

On the technology side, transaction volume slowed in the Biotechnology and Pharmaceutical sectors, down 43% and 12%, respectively, over the previous quarter, and off 3% and 24%, respectively, compared with the second quarter in 2014.

“The first quarter of 2015 really benefited from the M&A momentum that started in the fourth quarter of 2014. That slowed in the second quarter, but any quarter with more than 300 deals announced is still a good showing,” said Lisa E. Phillips, editor of Health Care M&A News. “With King v. Burwell decided, we’re seeing a strong pickup in health care M&A in the third quarter. In fact, July dollar volume has already surpassed $157 billion, which should put the third quarter at a new record. We’ll have to wait and see if the Federal Reserve raises interest rates in September, which could slow down deal volume again.”

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