Record-Breaking Health Care M&A Activity Recorded in 2022, According to Acquisition Data From LevinPro HC

NEW CANAAN, CONN. (PRWEB) JANUARY 13, 2023 – Health care merger and acquisition activity skyrocketed in 2022 to an all-time high of 2,395 transactions. This represented an 8% increase over the previous record of 2,214 deals recorded in 2021.

“Deal totals throughout the various sectors of health care reflect the limited downside risks faced by investors who are deploying capital in what is a significant and growing part of the U.S. economy,” said Glenn Kalinoski, Healthcare Editor at Irving Levin Associates LLC, which publishes the data on its LevinPro HC platform. “Amid declining stock markets in 2022, investors are looking for safety and what many view as predictable returns.”

Activity in the Physician Medical Groups sector soared 33% in 2022 as 608 deals were announced, compared with only 457 transactions in 2021. Biotechnology also generated a double-digit percentage rise in activity, gaining 17% with 141 deals in 2022 from 121 transactions in 2021.

The Other Services sector generated a 20% gain with 574 deals in 2022 compared with 477 transactions in 2021. Other Services includes subsectors such as ambulatory surgery centers, fertility storage solutions, health insurance support services and medical transportation services. The Medical Office Building subsector accounted for much of the increase, with 214 transactions in 2022 compared with 160 in 2021, representing a 34% jump.

Acquisitions by private equity firms continued the trend of being a more significant element of healthcare M&A activity. The 952 private equity deals in 2022 represented a 12% increase over the 852 transactions in 2021, and a 127% jump compared with the 419 deals recorded in 2020.

Headwinds began appearing in healthcare M&A activity at the end of 2022 as 547 deals were reported during the fourth quarter. This represented a 15% drop from the 647 transactions recorded during the final quarter of 2021. The first three quarters of 2022 produced increases compared to the same periods in 2021, including: 608 deals in the third quarter, representing a 17% increase over 520 transactions; 597 transactions in the second quarter for a 22% rise compared to 488 deals; and 643 deals in the first quarter, representing a 15% increase compared with 559 transactions.

Deal value in 2022 totaled $250 billion based on 482 transactions with disclosed prices. The dollar amount represented a 48% drop from 2021 when deal value reached $476.6 billion based on 615 transactions that had disclosed prices. In 2020 deal value totaled $270.6 billion based on 486 transactions with disclosed prices. The most expensive acquisition of 2022 was announced on December 12 as biopharmaceutical company Amgen Inc. purchased Horizon Therapeutics plc for $27.8 billion.

“The decline in activity we saw at the end of 2022 can be attributed to the rising interest-rate environment that represented a challenge for investors,” Kalinoski said. “Fears of a recession that may occur in 2023 also led to many investors re-evaluating valuations.”

Irving Levin Associates is celebrating 75 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters, and maintains databases on the healthcare and senior housing M&A markets.