Health Care M&A Spending Leaps 171% in Q2:2014, Compared with Q1:2014, According to Health Care M&A News

NORWALK, Conn.--()--Spending on health care mergers and acquisitions hit a new record for second quarter spending, according to Health Care M&A News. The combined total for M&A activity in the second quarter reached $135.2 billion, up 171% compared with the first quarter spending total ($49.9 billion), and up 152% versus the same period the year before ($53.6 billion). (View full video: The vast majority of that combined spending—91%—came from transactions on the Technology side, while Services contributed just 9%.

Total Deal Value, Q2:14 vs. Q1:14 and Q2:13
        Q2:14       Q1:14               Q2:13        
                  Change             Change
Services $12,250,352,900 $12,621,647,000 -3% $13,155,770,700 -7%
Technology       $122,922,049,570       $37,343,526,688       229%       $40,401,928,000       204%
Total       $135,172,402,470       $49,965,173,688       171%       $53,557,698,700       152%
Source: Health Care M&A News, July 2014

Deal volume also increased substantially in the second quarter, up 13% versus the previous quarter, to 297 transactions. The quarter also gained (20%) in comparison with the second quarter a year ago, when 248 deals were announced. Services transactions accounted for 52% of the Q2:14 deal total, and Technology transactions made up 48%.

Deal volume surged on the Technology side, to 143 deals, an increase of 31% compared with the previous quarter. Dollar volume exploded by 229%, to nearly $123 billion. While multi-billion-dollar pharmaceutical deals made headlines in Q2:14, the Medical Device sector actually turned in the highest dollar volume among the Technology segments, thanks to the $42.9 billion acquisition of Covidien plc by Medtronic Inc., which made up the majority of the total $59.1 billion spent in that sector. Pharmaceuticals had a combined total spending of $56.4 billion for the quarter.

On the Services side, deal volume remained flat at 154 deals, down 1% compared with the previous quarter. Dollar volume was also stagnant at $12.3 billion, representing a 3% drop in the same period, although this segment typically has fewer prices disclosed. Long-Term Care transactions led this category, with 60 deals and $5.2 billion in combined spending. The Physician Medical Group sector posted 15 transactions for the quarter (up 15% vs. Q1:14), but reported an unusually large deal for this sector, at $2.35 billion, as Amsurg Corp. acquired Sheridan Healthcare Inc. from private equity firm Hellman & Friedman.

“Now that the health information exchanges are functioning, investors have decided that health care is a good place to be,” said Lisa E. Phillips, editor of Health Care M&A News. “The equity markets are still rewarding the big-deal makers, as well. At this point, it looks as if this momentum could carry well into the third quarter.”

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

Q2:14 Q1:14 Q2:13
Sector Deals Deals Change Deals Change
Behavioral Health Care 7 5 40% 5 40%
Home Health & Hospice 14 15 -7% 18 -22%
Hospitals 9 13 -31% 22 -59%
Labs, MRI & Dialysis 7 11 -36% 10 -30%
Long-Term Care 60 63 -5% 56 7%
Managed Care 8 5 60% 3 167%
Physician Medical Groups 15 13 15% 17 -12%
Rehabilitation 6 2 200% 5 20%
Other 28   28   0%   29   -3%
Services subtotal 154 155 -1% 165 -7%
Biotechnology 34 26 31% 16 113%
eHealth 28 21 33% 10 180%
Medical Devices 31 27 15% 25 24%
Pharmaceuticals 50 35 43% 32 56%
Technology subtotal 143   109   31%   83   72%
Grand total 297 264 13% 248 20%

Source: Irving Levin Associates, Inc., July 2014

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Description: Health care mergers and acquisitions gained strength in the second quarter of 2014,while spending on those deals exploded to record levels.

Keywords: acquisition, takeover, merger, health care, M&A, long-term care, technology, services, pharmaceuticals, long-term care, physician medical groups, second quarter 2014, first quarter 2014, deal volume, healthcare transactions, healthcare deals


Lisa E. Phillips, Editor
Stephen M. Monroe, Partner
Phone: 203-846-6800
Fax: 203-846-8300

Release Summary

Spending on health care mergers and acquisitions hit a new record for second quarter spending, according to Health Care M&A News.



Lisa E. Phillips, Editor
Stephen M. Monroe, Partner
Phone: 203-846-6800
Fax: 203-846-8300