FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
Phone: 800-248-1668
Fax: 203-846-8300
pressreleases@levinassociates.com
HEALTH CARE SERVICES MERGERS AND ACQUISITIONS HIT SEVEN-YEAR LOW According to Irving Levin Associates, Inc.
NEW CANAAN, CT – January 25, 2001 – For the past four years, the volume of health care services mergers and acquisitions has always slowed in the fourth quarter. While the fourth quarter of 2000 was no exception, the size of the decline was larger than usual and the number of transactions in the quarter fell below 100, hitting a seven-year low, according to Irving Levin Associates, Inc., a research and health care publishing firm. In its fourth quarter 2000 Health Care M&A Report (www.healthcaremanda.com) the firm reports there were just 90 health care services mergers and acquisitions announced, representing a 30% decline from the third quarter and a 43% plunge from the fourth quarter of 1999.
The Health Care M&A Market
Fourth Quarter 2000 Deal Volume By Sector
Sector
Q4:00
Deals
Q3:00
Deals
%Change
Q4:99
Deals
%Change
Services:
Hospitals
20
15
+33%
31
-35%
Laboratories
14
15
-7%
12
+17%
Managed Care
12
11
+9%
15
-20%
Physician Medical Groups
8
23
-65%
18
-56%
Long-Term Care
7
13
-46%
19
-52%
Behavioral Health
6
5
+20%
9
-33%
Home Health
2
12
-83%
17
-88%
Rehabilitation
1
4
-75%
4
-75%
Other
18
31
-42%
28
-36%
Services Subtotal
88
129
-32%
153
-42%
Technology:
e-Health
42
Medical Devices
41
Biotechnology
34
Pharmaceuticals
26
Technology Subtotal
143
Grand Total
231
“During a year of bankruptcies, a volatile stock market and new reimbursement methodologies for Medicare, the health care services M&A market took a beating,” noted Stephen M. Monroe, a partner and managing editor at the firm. However, during the fourth quarter of 2000, the firm began tracking the merger activity in the health care technology sectors, which include e-health, medical devices, biotechnology and pharmaceuticals. “With 144 transactions during the quarter, the health care technology area is definitely dominating the merger and acquisition market and commanding the attention of investors,” Mr. Monroe added. The dollar volume of all health care related mergers and acquisitions announced during the fourth quarter was approximately $26 billion, of which almost 85% was in the health care technology areas.
The services sector has suffered from the financial distress in the physician medical group, home health and long-term care components of the health care market. “Three years ago, there were up to 80 transactions in the physician medical group practice market in one quarter, compared to just eight in the fourth quarter of 2000. Although not as severe, similar declines have occurred in the home health and long-term care segments,” stated Sanford B. Steever, editor of the report. “With hospital stocks rising throughout 2000, that market has been relatively active, culminating in Triad Hospitals’ $2.4 billion offer for Quorum Health Group in the fourth quarter,” continued Mr. Steever.
Irving Levin Associates, Inc. is a New Canaan, Connecticut-based research and publishing firm specializing in health care investments. The firm has over 50 years of experience in the health care acquisition market. To purchase The Health Care M&A Report, consisting of four quarterly reports, 12 monthly newsletters and 50 weekly bulletins, please call 1-800-248-1668.
Click here to get more information or to order any of our Publications.
Back to top
