NORWALK, Conn.–(BUSINESS WIRE)–
Health care merger and acquisition activity picked up in the third
quarter of 2013, compared with the second quarter. (View full video: http://www.levinassociates.com/pr2013/pr1310mamq3.)
Deal volume was up nearly 16% versus the previous quarter, with 267
deals announced. This year’s third quarter also outperformed the same
quarter a year ago, up almost 20%, according to Health Care MA News.
The Health Care MA Market – Deal Volume by Sector
Behavioral Health Care
Home Health and Hospice
Laboratories, MRI and Dialysis
Physician Medical Groups
Source: Health Care MA News, October 2013
However, deal value was down slightly compared with the previous
quarter. The preliminary total for MA activity in the third quarter is
$50.8 billion, down 4.2% compared with the $53.0 billion spent in Q2:13.
Deal value actually increased by 35.1% compared with the third quarter
of 2012, when buyers committed just $37.6 billion.
Five sectors posted declines in the number of deals announced, compared
with the previous quarter: Behavioral Health Care (-60%), Home Health
Hospice (-50%), Labs, MRI Dialysis (-20%), Physician Medical Groups
(-6%) and Medical Devices (-8%). Two of those sectors—Behavioral Health
Care and Home Health Hospice—do not post significant numbers of deals,
so their results typically show wide swings from quarter to quarter.
The health care services sector still managed to post a 6% gain over
Q2:13, with 160 deals announced, and showed a healthy 13.5% increase
versus Q3:12. The health care technology sector also posted gains, with
107 deals announced in the third quarter, up 34% compared with the
previous quarter and 31% over the year-ago quarter. eHealth deals staged
a comeback (+100%), although from a very small base, while Biotechnology
(56%) and Pharmaceuticals (39%) showed even stronger performance than
the previous quarter.
“Deal-making momentum is growing, after a very low level of activity,”
said Lisa E. Phillips, editor of Health Care MA News. “The
Long-Term Care and Hospital sectors were even stronger than in the
second quarter, and compared with the third quarter in 2012.
Biotechnology and Pharmaceuticals are still going strong, and we expect
that to continue—at least until the major drug makers feel their
pipelines are full again.”
Hospital deals were the attention-getters in Q3:13, with Community
Health System’s $7.6 billion bid for Health Management Associates coming
on the heels of the Tenet Healthcare Corporation’s $4.3 billion
acquisition of Vanguard Health Systems in Q2:13. Transactions of that
size aren’t likely to be repeated in the near future, but deal volume in
the sector will probably remain elevated as more standalone hospitals
seek to join larger health systems in order to remain viable.
“We expect to see even more MA activity in the fourth quarter,” Ms.
Phillips said. “Now that the Affordable Care Act is poised to take full
effect in January, the uncertainty felt in many sectors is starting to
dissipate. Health systems that have made strategic acquisitions such as
physician medical groups will now turn their attention to long-term
care, home health care and rehabilitation to fill out their care
continuum requirements. We still expect a fluid market in Physician
Medical Groups and continued consolidation among hospitals.”
For more information on The Health Care MA Information Source or
Health Care MA News, or for a membership to any of Irving
Levin Associates’ subscriptions, please 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 merger and acquisition databases, on the
health care and senior housing markets.
Note: If you would like to receive this via email, please send your
email address to firstname.lastname@example.org
Health Care MA News
Lisa E. Phillips, Editor
Stephen M. Monroe, Partner