Reporting from the Healthcare M&A Frontlines: Irving Levin

By Clive Riddle, October 26, 2012

Irving Levin Associates has released quarterly merger & acquisition data from two reports they have just published: The Health Care M&A Report, covering the various healthcare sectors, and The Hospital M&A Market Report, Third Edition, 2012.

According to Irving Levin, activity declined during the past quarter. Stephen M. Monroe, Partner at Irving Levin Associates tells us, “historically, the third quarter is usually the slowest quarter of the year, but with the continued economic turmoil in Europe combined with the uncertainty of the 2012 presidential election in the U.S., there has been more caution in the health care market…. Two large managed care acquisitions made up more than half of the total dollars spent in the health services M&A market in the third quarter, and there really were no other dominant deals like that in any of the other sectors, whether technology or services,” according to Mr. Monroe.”

Irving Levin cited the total activity amounted to $38.2 billion in transactions, with managed care comprising 32% of the dollars, pharmaceuticals 24%, Home Health & Hospice 12% and the remain 32% spread among all other segments.

With specific respect to the hospital market, Irving Levin reports that “the Hospital M&A market was continuing its post- recession rebound, but lately it has been slumping in terms of dollars committed.”

Here are data tables Irving Levin has shared regarding M&A activity:

The Health Care M&A Market – Deal Volume By Sector

Sector	Q3:12 Deals*	Q2:12 Deals	% Change	Q3:11 Deals	% Change
Services Segment:
Long-Term Care	52	36	44%	43	21%
Hospitals	11	23	-52%	16	-31%
Physician Groups	8	21	-62%	28	-71%
Labs, MRI, Dialysis	21	10	110%	6	250%
Managed Care	6	9	-33%	5	20%
Home Health Care	9	6	50%	6	50%
Behavioral Health Care	3	4	-25%	1	200%
Rehabilitation	3	3	0%	6	-50%
Other	22	24	-8%	21	5%
Services Subtotal	135	136	-1%	132	2%
Technology Segment:
Medical Devices	19	44	-57%	50	-62%
Pharmaceuticals	19	29	-34%	24	-21%
e-Health	25	24	4%	21	19%
Biotechnology	18	22	-18%	12	50%
Technology Subtotal	81	119	-32%	107	-24%
Grand Total	216	255	-15%	239	-10%

Hospital Mergers and Acquisitions January 1, 2007 – June 30, 2012 

Year	Number of Transactions	Dollar Volume of Transactions
2007	60	$9,172,000,000
2008	60	$2,502,000,000
2009	50	$3,777,000,000
2010	76	$4,289,000,000
2011	90	$9,905,000,000
2012 6 Months	47	$812,500,000