Health Care M&A Spending Stays Strong in Q3:2014 as Deal Volume Keeps Rising, According to Health Care M&A News

NORWALK, Conn.--()--Health care merger and acquisition activity increased again in the third quarter of 2014. Deal volume rose 10% versus the previous quarter, to 326 transactions. (View full video: http://www.levinassociates.com/pr2014/pr1410mamq3.) M&A activity in the quarter was up 19% versus the third quarter a year ago, when 275 deals were announced. Services transactions accounted for 53% of the Q3:14 deal total, and Technology transactions made up 47%.

Health Care M&A – Deal Volume by Sector

      Q3:14     Q2:14           Q3:13      
Sector     Deals     Deals     Change     Deals     Change
Services
Behavioral Health Care 3 7 -57% 2 50%
Home Health & Hospice 13 15 -13% 12 8%
Hospitals 9 9 0% 23 -61%
Labs, MRI & Dialysis 8 7 14% 8 0%
Long-Term Care 80 61 31% 60 33%
Managed Care 5 8 -38% 6 -17%
Physician Medical Groups 14 15 -7% 15 -7%
Rehabilitation 5 5 0% 4 25%
Other 36     28     29%     37     -3%
Services subtotal 173 155 12% 167 4%
Technology
Biotechnology 27 34 -21% 25 8%
eHealth 33 28 18% 17 94%
Medical Devices 25 31 -19% 23 9%
Pharmaceuticals 68     49     39%     43     58%
Technology subtotal 153 142 8% 108 42%
Grand total     326     297     10%     275     19%

Source: Health Care M&A News, October 2014

Deal value hit a new record for third-quarter spending on health care transactions. The combined total for M&A activity in the third quarter reached $117.2 billion, which was actually 13% lower compared with the blistering pace for spending set in the second quarter ($135 billion). Even so, deal value in Q3:14 was 133% higher than the same period a year ago, when the combined deal value totaled just $50.2 billion.

Health Care M&A – Deal Value by Sector

      Q3:14     Q2:14     Change     Q3:13     Change

Services

    $12,497,950,641     $12,420,352,900     1%     $17,371,175,000     -28%
Technology     104,719,535,141     122,581,805,148     -15%     32,862,735,504     219%
Total $117,217,485,782 $135,002,173,148 -13% $50,233,910,504 133%
                               

Source: Health Care M&A News, October 2014

Spending on transactions in the Technology sectors reached $104.7 billion, and accounted for 89% of the quarter’s total. While that total is a record for any previous third quarter, it represents a decrease of 13% compared with the high-flying second quarter. The Pharmaceutical sector made up 21% of all Q3:14 deals, but 74% of all spending ($86.7 billion). The majority came from the largest deal of the year announced so far, the $54.7 billion acquisition of Shire plc by AbbVie Inc. Five of the quarter’s 10 largest deals were for pharmaceutical targets.

On the Services side, deal volume increased by 12% compared with the previous quarter, with 173 deals. Dollar volume was stagnant at $12.5 billion, representing a gain of just 1% in the same period. Long-Term Care transactions reached a new record with 80 deals and $9.6 billion in spending. The sector’s deal activity comprised 29% of the total deal volume, and 8% of the total deal value.

“The third quarter was busy, and the fourth quarter could be even busier,” said Lisa E. Phillips, editor of Health Care M&A News. “Even though the federal government clamped down on companies taking advantage of lower corporate tax rates abroad, deal volume hasn’t slackened. 2014 could be one for the record books.”

For more information on The Health Care M&A Information Source or Health Care M&A News, or for a membership to any of our services, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, Connecticut 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.

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Contacts

Irving Levin Associates, Inc.
Lisa E. Phillips, Editor
Phone: 203-846-6800
Fax: 203-846-8300

Release Summary

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

Contacts

Irving Levin Associates, Inc.
Lisa E. Phillips, Editor
Phone: 203-846-6800
Fax: 203-846-8300