NORWALK, Conn.--(BUSINESS WIRE)--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: www.levinassociates.com/pr2014/pr1407mamq2.) 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|
|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
|Behavioral Health Care||7||5||40%||5||40%|
|Home Health & Hospice||14||15||-7%||18||-22%|
|Labs, MRI & Dialysis||7||11||-36%||10||-30%|
|Physician Medical Groups||15||13||15%||17||-12%|
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