There were fewer merger and acquisition deals in the healthcare sector in 2013 than in 2012, but those deals cost more.
According to Irving Levin Associates’ Health Care M&A News, early M&A figures indicate that 1,002 deals were announced in 2013, down 8 percent (1,091) from 2012. Total deal value in 2013 is approximately $163.5 billion, compared to $143.7 billion the year before.
2013’s fourth quarter doesn’t reflect the year’s total deals, with deal value slowing in Q4 to $43.6 billion, down 16 percent from $51.6 billion in Q3.
Among the sectors of the healthcare industry with strong transactions last year were the pharmaceutical sector (151 deals) and the long-term care sector. Long-term care set a record for the sector with 223 deals.
[See also: Senior housing and care industry M&A driven by smaller operators.]
With healthcare reform putting a focus on improving patient outcomes, acquirers are increasingly focusing on the post-acute sector. Among the categories of this sector with gains in the number of deals in Q4 were long-term care (10 percent); home health and hospice (100 percent); and rehabilitation (50 percent).
The technology sector – encompassing pharmaceuticals, medical devices, eHealth and biotechnology – also gained in transactions from Q3 to Q4, partly due to an increased interest by providers in data analytics as a means to cut costs and improve patient outcomes.
Irving Levin Associates expects M&A to be strong in 2014, with the biggest influencers being regulatory changes, such as ICD-10, and the inflow of newly-insured.