Health care M&A finishes strong in 2011

Market saw 980 deals worth $227.4 billion, report finds

The health care merger and acquisition market in 2011 generated 980 deals worth $227.4 billion, an increase of 9% over 2010, according to a recent report.

According to Irving Levin Associates, a firm that monitors M&A activity, during the 10-year period starting in 2002, 2011 ranks fourth in terms of dollar volume. Although the report acknowledges that smaller firms still face challenges in the current fiscal climate, larger companies have bypassed this issue by funding acquisitions from their own cash flow.

Although Irwin Levin's database lists total 2011 acquisitions at just 980 deals—compared to last year's 1,007 transactions—officials expect to see an increase in deal volume after 10-Ks are due this March.

The report also noted that health care services accounted for 545 deals, of 56% of total deal volume. Technology accounted for the remaining 435 deals, reversing an earlier trend when the sector produce more deals that health services, according to the report.

The individual hospital sectors reporting 100 deals or more in 2011 include:

  • Medical devices with 170 deals;
  • Long-term care with 161 deals;
  • Pharmaceuticals with 115 deals; and
  • Physician medical groups with 107.

The health care sectors with the fewest deals were behavioral health (12 deals) and rehabilitation (14 deals) (hfma, 1/23; Irving Levin Associates release, January 2012).


Finance, Strategy

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