Health Care M&A Deal Volume and Value Both Set New Records in Q3: 2015, According to Health Care M&A News

IMMEDIATE RELEASE  
Lisa E. Phillips, Editor
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NORWALK, CT – October 27, 2015 – Health care merger and acquisition activity increased by 18% in the third quarter of 2015, compared with the second quarter of the year. Deal volume in the third quarter rose to 385 transactions, from 327 in the previous quarter. The 385 deals marked the highest number of transactions in any previous third quarter. Combined spending in the third quarter hit $198.3 billion, a new record for all previous quarters, third or otherwise. The total represents a 265% increase over the second quarter’s $54.3 billion, and an increase of 214% compared with the same quarter in 2014 ($63.2 billion), according to Health Care M&A News. 
                        The Health Care M&A Market – Deal Volume by Sector

 

Q3:15

Q2:15

 

Q3:14

 

Sector
Services

Deals

Deals

%
Changed

Deals

%
Changed

Behavioral Health Care

10

6

67%

4

150%

Home Health & Hospice

9

6

50%

15

-40%

Hospitals

33

24

38%

19

74%

Laboratories, MRI & Dialysis

16

15

7%

8

100%

Long-Term Care

90

65

38%

85

6%

Managed Care

12

8

50%

5

140%

Physician Medical Groups

15

22

-32%

14

7%

Rehabilitation

7

6

17%

5

40%

Other

46

40

15%

36

28%

     Services subtotal

238

192

24%

191

25%

Technology

 

 

 

 

 

Biotechnology

41

34

21%

27

52%

eHealth

33

34

-3%

34

-3%

Medical Devices

31

29

7%

26

19%

Pharmaceuticals

42

38

11%

67

-37%

      Technology subtotal

147

135

9%

154

-5%

Grand Total

385

327

18%

345

12%

Source: Health Care M&A News, October 2015

 
Health care services represented 62% of the third quarter’s transactions, slightly higher than the previous quarter (57%), as well as the same quarter in 2014 (55%). Still, the 238 deals represented a 24% increase over the previous quarter (192 deals). Only one of the sectors, Physician Medical Groups, posted a decline in transaction volume, while Behavioral Health Care managed a 67% gain over the previous quarter.
On the technology side, transaction volume was strong in the Biotechnology and Pharmaceutical sectors, up 21% and 11%, respectively, over the previous quarter. Compared with the same quarter in 2014, Biotech transactions were up 52%, while Pharmaceuticals were off 37%.
“Transaction volume in the third quarter erased all doubt that M&A in the health care industry is slowing,” said Lisa E. Phillips, editor of Health Care M&A News. “The massive spending is largely the result of two deals in the Managed Care sector—the Aetna/Humana and Anthem/Cigna acquisitions—which contributed a combined $91 billion to the quarter’s total. Subtracting those two deals from the total still leaves approximately $107 billion. While that amount isn’t a record for health care M&A spending in a quarter, it’s a strong sum nonetheless.”
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