NORWALK, Conn.--(BUSINESS WIRE)--During 2010 and based on preliminary results, a total of 913 mergers and acquisitions were announced in 13 sectors of the health care industry, a 3% decrease from the 945 transactions announced in 2009. Based on prices revealed to date, a total of $206.5 billion was committed to finance the year’s 913 deals. This represents an 11% decrease from the $232.2 billion in 2009. In terms of dollars committed to M&A deals, 2010 is the fifth-largest year of the past 10 years.
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M&A DEAL AND DOLLAR VOLUME FOR 2010 AND 2009* |
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| DEAL VOLUME | DOLLAR VOLUME | |||||||||||||||||
| Sector | 2010 | 2009 | % Change | 2010 | 2009 | % Change | ||||||||||||
| Behavioral Health | 7 | 11 | -36% | $3,491,000,000 | $79,659,000 | 4,280% | ||||||||||||
| Home Health | 41 | 42 | -2% | 1,405,083,000 | 140,997,000 | 896% | ||||||||||||
| Hospitals | 75 | 53 | 42% | 17,442,095,000 | 1,813,300,000 | 860% | ||||||||||||
| Laboratories, MRI, Dialysis | 39 | 30 | 30% | 2,230,061,950 | 90,457,000 | 2,365% | ||||||||||||
| Long-Term Care | 103 | 88 | 17% | 11,735,704,464 | 2,918,175,000 | 302% | ||||||||||||
| Managed Care | 13 | 15 | -13% | 4,093,323,000 | 850,000,000 | 380% | ||||||||||||
| Physician Medical Groups | 60 | 41 | 46% | 425,439,000 | 99,100,000 | 329% | ||||||||||||
| Rehabilitation | 12 | 11 | 9% | 236,890,000 | 22,085,000 | 973% | ||||||||||||
| Other |
91 |
78 |
16% |
23,014,518,522 |
6,276,251,881 |
267% |
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| Services Subtotal | 441 | 369 | 20% | $64,074,114,936 | $12,290,024,881 | 421% | ||||||||||||
| Biotechnology | 110 | 193 | -43% | $55,951,409,000 | $47,445,849,040 | 18% | ||||||||||||
| E-Health | 73 | 69 | 6% | 6,893,651,063 | 11,534,925,000 | -40% | ||||||||||||
| Medical Devices | 165 | 176 | -6% | 41,493,789,929 | 13,820,275,951 | 200% | ||||||||||||
| Pharmaceuticals |
124 |
138 |
-10% |
38,101,480,000 |
147,122,047,185 |
-74% |
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| Technology Subtotal | 472 | 576 | -18% | $142,440,330,892 | $219,923,097,176 | -35% | ||||||||||||
| Grand Total | 913 | 945 | -3% | $206,514,445,828 | $232,213,112,057 | -11% | ||||||||||||
| *2010 Preliminary Figures | ||||||||||||||||||
The year-over-year results are skewed by two mega-deals in the 2009 Pharmaceutical industry worth a combined total of $109.1 billion, Pfizer’s $68.0 billion acquisition of Wyeth and Merck & Co.’s $41.1 billion acquisition of Schering-Plough Corp. Controlling for these two deals, both announced just before the generational market bottom in March 2009, shows that the health care M&A market continues to climb out of the Great Recession with a full head of steam.
“The passage of health care reform in March 2010 has allowed providers of health care services to pencil out clearer projections of their revenues and cash flows. This aids them in turn in determining more acceptable valuations of businesses they wish to buy or sell,” stated Stephen M. Monroe, managing editor at Irving Levin Associates, Inc., which publishes The Health Care M&A Report. “The thawing of credit has further facilitated the great surge of health care services M&A activity during 2010, with spending up 421% over the comparable levels in 2009. Private equity has also been swift to return to the market to put to use money which had been sitting on the sidelines, and to find well-priced deals before the market gets much hotter.” Activity in the Hospital sector, generally perceived to be the focus of the health care delivery system, is forecast to remain strong for 2011.
The health care technology segment, including Biotechnology, e-Health, Medical Devices and Pharmaceuticals, posted 472 deals, or 52% of the year’s deal volume, worth $142.4 billion. “If we remove 2009’s two mega-deals from the mix, spending on Pharmaceutical M&A was essentially flat from 2009 into 2010,” observed Sanford Steever, Ph.D., editor of the Report. “During 2010, pharma companies pursued deals in the biotech sector to find new sources of revenue to replace what is being lost to the expiration of patent protection and exclusivity on their blockbuster drugs.” Going forward in 2011, the big pharma companies will continue to focus on biotechnology companies for new, hard-to-copy products, and their potentially blockbuster sales.
For more information on The Health Care M&A Information Service, The Health Care Services Acquisition Report or for a subscription to any Irving Levin publication, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at www.levinassociates.com. This privately held corporation publishes research reports and newsletters, and maintains health care merger and acquisition and venture capital databases, as well as the senior housing market.
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