Health Care M&A Deal Volume and Value Both Set New Records in Q3: 2015, According to Health Care M&A News

NORWALK, Conn.--(BUSINESS WIRE)--Health care merger and acquisition activity increased by 18% in the third quarter of 2015, compared with the second quarter of the year. Deal volume in the third quarter rose to 385 transactions, from 327 in the previous quarter. The 385 deals marked the highest number of transactions in any previous third quarter. Combined spending in the third quarter hit $198.3 billion, a new record for all previous quarters, third or otherwise. The total represents a 265% increase over the second quarter’s $54.3 billion, and an increase of 214% compared with the same quarter in 2014 ($63.2 billion), according to Health Care M&A News.

The Health Care M&A Market – Deal Volume by Sector
	Q3:15 Deals	Q2:15 Deals	Change	Q3:14 Deals	Change
Services
Behavioral Health Care	10	6	67%	4	150%
Home Health & Hospice	9	6	50%	15	-40%
Hospitals	33	24	38%	19	74%
Labs, MRI & Dialysis	16	15	7%	8	100%
Long-Term Care	90	65	38%	85	6%
Managed Care	12	8	50%	5	140%
Physician Medical Groups	15	22	-32%	14	7%
Rehabilitation	7	6	17%	5	40%
Other	46	40	15%	36	28%
Services subtotal	238	192	24%	191	25%
Technology
Biotechnology	41	34	21%	27	52%
eHealth	33	34	-3%	34	-3%
Medical Devices	31	29	7%	26	19%
Pharmaceuticals	42	38	11%	67	-37%
Technology subtotal	147	135	9%	154	-5%
Grand Total	385	327	18%	345	12%
Source: Health Care M&A News, October 2015

Health care services represented 62% of the third quarter’s transactions, slightly higher than the previous quarter (57%), as well as the same quarter in 2014 (55%). Still, the 238 deals represented a 24% increase over the previous quarter (192 deals). Only one of the sectors, Physician Medical Groups, posted a decline in transaction volume, while Behavioral Health Care managed a 67% gain over the previous quarter.

On the technology side, transaction volume was strong in the Biotechnology and Pharmaceutical sectors, up 21% and 11%, respectively, over the previous quarter. Compared with the same quarter in 2014, Biotech transactions were up 52%, while Pharmaceuticals were off 37%.

“Transaction volume in the third quarter erased all doubt that M&A in the health care industry is slowing,” said Lisa E. Phillips, editor of Health Care M&A News. “The massive spending is largely the result of two deals in the Managed Care sector—the Aetna/Humana and Anthem/Cigna acquisitions—which contributed a combined $91 billion to the quarter’s total. Subtracting those two deals from the total still leaves approximately $107 billion. While that amount isn’t a record for health care M&A spending in a quarter, it’s a strong sum nonetheless.”

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