Report Finds Spending on Healthcare Mergers and Acquisitions Rises in Third Quarter; Hospital Transactions Surge

A recent report by Irving Levin Associates found that a total of 233 mergers and acquisitions were announced in the healthcare industry during the third quarter of 2009, and the dollars spent on these deals surged 38 percent since the previous quarter, according to an Irving Levin news release.

The number of deals occurring in the third quarter is roughly equal to the 236 deals taking place during the second quarter of 2009, but the spending on these activities grew significantly from $27.9 billion in second-quarter 2009 to $38.4 billion in the third quarter.

The largest number of deals within the healthcare industry during the third quarter took place in the health information technology sector, which also attracted the greatest amount of capital. Within the technology sector, pharmaceuticals and biotechnology together captured 33 percent of the third quarter's deal volume and 69 percent of all dollars committed to healthcare M&A.

Within the services sector, 21 M&A deals were announced during the third-quarter, suggesting that lenders and other providers of capital are looking to do more business, according to the release. Within the services, sector the hospital industry reached its highest transaction volume in eight years; it last peaked at 27 deals in the fourth quarter of 2001, according to the release.

Third-quarter spending on healthcare mergers and acquisitions by sector were:

Technology

Pharmaceuticals — $ 17.3 billion               
Biotechnology — $9.1 billion                                 
Medical Devices — $5.2 billion                              
e-Health — $4.1 billion                                     

Services

Long-Term Care — $1.3 billion                 
Managed Care — $590.5 million                                       
Hospitals — $282.5 million                            
Behavioral Health Care — $40 million                 
Labs, MRI, Dialysis — $29.2 million         
Home Health Care — $11.3 million                        
Physician Medical Groups — $9.2 million            
Other service — $466 million     

Read the Irving Levin Associates release on healthcare mergers and acquisitions.

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