FOR IMMEDIATE RELEASE
Stephen M. Monroe, Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com
NORWALK, CT – July 19, 2012– The dollar volume of merger and acquisition activity in the health care industry more than doubled in the second quarter of 2012 compared with the previous quarter, despite a decline in the number of transactions announced. In fact, with $61.2 billion in announced mergers and acquisitions in the second quarter, it was the most active quarter since the second quarter of 2011 when nearly $75 billion of health care M&A deals were announced. The 251 announced mergers and acquisitions equaled the year-ago number.
The Health Care M&A Market Q2:12– Deal Volume By Sector
Q2:12 Q1:12 % Q2:11 %
Sector Deals* Deals Change Deals Change
Services Segment:
Long-Term Care 35 41 -15% 45 -22%
Hospitals 22 26 -15% 32 -31%
Physician Groups 21 21 0% 28 -25%
Labs, MRI, Dialysis 10 5 100% 4 150%
Managed Care 9 6 50% 4 125%
Home Health Care 5 11 -55% 7 -29%
Behavioral Health Care 4 7 -43% 3 33%
Rehabilitation 2 5 -60% 2 0%
Other 25 38 -34% 19 32%
Services Subtotal 133 160 -17% 144 -8%
Technology Segment:
Medical Devices 43 45 -4% 36 -19%
Pharmaceuticals 29 23 26% 34 -15%
e-Health 24 28 -14% 16 50%
Biotechnology 22 32 -31% 20 10%
Technology Subtotal 118 128 11% 106 11%
Grand Total 251 288 5% 250 0%
*Preliminary figures
The table above presents the number of M&A deals posted in each of 13 sectors of the health care industry during Q2:12, as well as the prior and year-ago quarters and the percentage change from those quarters. “The health care M&A market has been fairly steady, averaging just above 250 transactions a quarter, but it has been the dollar volume, impacted by the number of mega-deals, that fluctuates so much,” commented Stephen M. Monroe, Partner at Irving Levin Associates and editor of The Health Care M&A Report.
The Health Care M&A Market Second Quarter 2012
Dollar Amounts By Sector*
Sector
Dollar Amount
Second Quarter 2012
Percent of Quarter
Pharmaceuticals
$ 20,702,580,000
34%
Medical Devices
11,582,645,000
19%
Biotechnology
4,841,041,000
8%
E-Health
1,004,463,000
2
Technology subtotal
$ 38,130,729,000
62%
Hospitals
$ 4,533,000,000
7%
Physician Medical Groups
4,222,817,000
7%
Long-term Care
1,889,081,000
3%
Managed Care
730,000,000
1%
Behavioral Health Care
517,000,000
˂1%
Labs, MRI & Dialysis
348,900,000
˂1%
Rehabilitation
6,340,000
˂1%
Home Health Care
—
—
Other Services
10,827,350,000
18%
Services subtotal
$ 23,074,488,000
38%
Total health care
$ 61,205,217,000
100%
*Preliminary figures
The table above lists the dollar amount that each sector of the health care industry captured in Q2:12, along with the percentage contribution of each to the $61.2 billion total committed during the quarter.
The increase in M&A activity was spread across both the technology and services segments of health care. The $38.1 billion in health care technology transactions represented an 87% jump from the first quarter, while the $23.1 billion in health care services acquisitions was almost triple the dollar volume in the first quarter. In the health care services segment, long-term care and hospital acquisitions continue to dominate both the number of transactions and the dollar volume, with physician medical group acquisitions also very active as health care market participants try to get ready for the increase in Accountable Care Organizations. In the technology M&A segment, the number of e-health transactions has been growing and has averaged over 20 acquisitions per quarter for the past four quarters. “The fact that the Supreme Court decision validated most aspects of the Affordable Care Act means that providers and payers will be consolidating to be stronger players in the new market. Coincidence or not, there was a flurry of announced M&A transactions in the week after the decision,” stated Stephen Monroe.
For more information on The Health Care M&A Report, or for a subscription to any Irving Levin publications, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at www.levinassociates.com. This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition databases, on the health care and senior housing markets.
Click here to get more information on any of our Publications.
