Mergers and acquisitions activity declines in 2001 - In the News - Brief Article - Statistical Data Included

Healthcare Financial Management, Jan, 2002

The September 11 attacks on New York and Washington, D.C., along with the consequent suspension of the capital markets and the developing economic recession, contributed to a 16 percent decline in the number of healthcare mergers and acquisitions in the third quarter of 2001. A total of 174 healthcare mergers and acquisitions valued at $7.9 billion were announced in the third quarter of 2001, down from 208 deals valued at $24.4 billion in the second quarter of 2001, according to Irving Levin Associates, Inc., New Canaan, Connecticut. Of the $7.9 billion in deals, the technology segment accounted for $5.68 billion, or 71 percent of the total value, while the healthcare services segment accounted for $2.26 billion, or 29 percent of the total value.

Of the 174 deals in the third quarter of 2001, 96 deals, or 55 percent, involved the four sectors of the healthcare technology segment; the remaining 78 deals, or 45 percent, involved the nine sectors of the healthcare services segment. This reverses the trend from the two previous quarters, when the healthcare services segment accounted for 54 percent of the deals in the second quarter of 2001 and 57 percent of the deals in the first quarter of 2001.

In the technology segment, the biotechnology sector recorded 29 deals, the medical device sector recorded 26 deals, the pharmaceutical sector recorded 25 deals, and the e-health sector recorded 16 deals.

In the services segment, the three most active sectors were hospitals (18 deals), laboratories (13 deals), and long-term care (11 deals). Merger and acquisition activity remained relatively low in other service sectors, including physician medical groups (seven deals), behavioral health (four deals), and rehabilitation (one deal).