FOR IMMEDIATE RELEASE
Stephen M. Monroe, Partner
Sanford B. Steever, Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com
NORWALK, CT –January 16, 2009 – During 2008 and based on preliminary results, a total of 973 mergers and acquisitions were announced in 13 sectors of the health care industry, a 9% decrease from the 1,074 transactions announced in 2007. Based on prices revealed to date, a total of $223.1 billion was committed to finance the year’s 973 deals. This represents a 4% decrease from the $231.8 billion in 2007. Accordingly, 2008 is the third-largest year ever for health care M&A in terms of dollars spent, after 2006 with $268.3 billion and 2007, but ahead of 2004 with $164.3 billion and 2005 with $162.3 billion.
M&A Deal and Dollar Volume for 2008 and 2007*
Deal Volume Dollar Volume
Sector 2008 2007 % Change 2008 2007 % Change
Behavioral Health 13 13 0% $ 166,000,000 $ 59,000,000 64%
Home Health 48 49 -2% 2,400,000,000 1,700,000,000 41%
Hospitals 49 58 -16% 2,400,000,000 8,700,000,000 -72%
Laboratories, MRI, Dialysis 40 54 -26% 457,000,000 5,500,000,000 -92%
Long-Term Care 94 127 -26% 1,800,000,000 17,000,000,000 -89%
Managed Care 16 28 -43% 1,800,000,000 8,800,000,000 -80%
Physician Medical Groups 50 41 22% 269,000,000 98,000,000 64%
Rehabilitation 27 16 69% 35,000,000 432,000,000 -92%
Other 113 110 3% 8,700,000,000 14,600,000,000 -40%
Services Subtotal 450 496 -9% $ 18,000,000,000 $ 56,889,000,000 -68%
Biotechnology 150 145 3% $ 93,700,000,000 $ 43,400,000,000 116%
E-Health 67 60 12% 4,100,000,000 1,600,000,000 156%
Medical Devices 166 193 -14% 66,500,000,000 58,300,000,000 14%
Pharmaceuticals 140 180 -22% 40,800,000,000 71,600,000,000 -43%
Technology Subtotal 523 578 -10% $ 205,100,000,000 $ 174,900,000,000 17%
Grand Total 973 1,074 -9% $ 223,100,000,000 $ 231,789,000,000 -4%
*preliminary figures
“As a result of credit gridlock during the year, health care M&A activity slowed down in the services sectors, particularly those that are real estate-intensive, such as Hospitals and Long-Term Care,” stated Stephen M. Monroe, managing editor at Irving Levin Associates, Inc., which publishes The Health Care M&A Report. “With the markets favoring technology, however, most of the health care technology sectors in 2008 posted gains in dollar value over their prior-year levels.”
The four sectors of the health care technology segment, including Biotechnology, e-Health, Medical Devices and Pharmaceuticals, posted 523 deals, or 54% of the year’s deal volume. A combined total of $205.1 billion, up 17% from 2007 levels, was committed to the technology sector in 2008. “With $93.7 billion committed, up 116% from 2007, Biotechnology deals led the surge in health care M&A for 2008,” observed Sanford Steever, Ph.D., editor of the Report. “The 43% drop in dollar value for deals in the Pharmaceutical sector in 2008 was more than offset by the big pharma companies who were vigorously competing to acquire biotechs and biopharmas, along with their potential for generating blockbuster drugs and revenues.”
Given the relatively non-cyclical nature of health care, M&A activity in this industry has not been as severely impacted as in other parts of the economy. “We believe that, going forward, the merger and acquisition market for health care, particularly medical technology, will remain stronger than in other industries,” Mr. Steever indicated. “Despite the credit crunch and market meltdown of the past months, expectations are that purse strings will loosen and acquisition activity will pick up as we enter the second half of 2009 and the beginning of 2010.”
For more information on The Health Care M&A Information Service, The Health Care 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. This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition and venture capital databases, on the health care and senior housing markets.
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