Health Care M&A Volume Dropped 24% in Q1:2020, According to HealthCareMandA.com

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Health care merger and acquisition activity fell 24% in the first quarter of 2020, to 366 transactions, compared with the previous quarter’s 483 announced deals.

Health Care M&A
“Looking back at the first quarter, it’s evident that the coronavirus pandemic began to affect health care deal making in February and into March."

Health care merger and acquisition activity fell 24% in the first quarter of 2020, to 366 transactions, compared with the previous quarter’s 483 announced deals. M&A in the first quarter of 2020 was 10% lower than the same quarter in 2019. Combined spending in the first quarter totaled nearly $34.1 billion, based on disclosed prices, down 47% compared with the previous quarter’s $63.4 billion. It was 77% lower than the $150.3 billion reported in the same quarter in 2019, according to HealthCareMandA.com.

Healthcare services transactions made up 69% of the first quarter’s deal volume, similar to the previous four quarters. The Long-Term Care sector once again ranked the busiest, although deal volume slipped 17% compared with the fourth quarter of 2019 and was 19% lower than the same quarter in 2019. Year-over-year, three of the services sectors posted impressive gains—Behavioral Health Care (+29%), Laboratories, MRI & Dialysis (+42%) and Other Services (+45%). Combined spending on the services side accounted for 47% of the quarter’s total, approximately $16.1 billion, based on disclosed prices.

Healthcare technology deals accounted for 31% of the first quarter’s deal volume, with 115 transactions. The eHealth sector was the only one of the four tech sectors to post a year-over-gain, up 7% with 58 deals. Deal volume in the digital health sector has been consistently stronger than the other tech sectors for the past five quarters. Combined spending for all the technology sectors was $18.0 billion.

“Looking back at the first quarter, it’s evident that the coronavirus pandemic began to affect health care deal making in February and into March,” said Lisa E. Phillips, editor of HealthCareMandA.com. “January’s deal total came in at 135 transactions. February had 114, and March was only 117. That’s pretty low for a longer month like March.

“But we expect the second quarter will be much lower, given the grip the pandemic has on the U.S. economy,” Phillips added. “Once the quarter’s over, the first quarter’s numbers may look robust, by comparison.”

For more information on the HealthCareMandA.com investment research source, or for a membership in any of Irving Levin Associates’ services, please call 800-248-1668. Irving Levin Associates, Inc., established in 1948, is headquartered in Norwalk, Connecticut. This privately held corporation publishes annual and quarterly research reports, monthly and weekly newsletters, and maintains merger and acquisition databases on the health care and senior housing markets. If you would like to receive future releases, please email pressreleases@levinassociates.com.

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Lisa Phillips
@HealthCareMandA
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