Volume dips, value skyrockets for healthcare M&As in 2016
The healthcare industry has seen fewer mergers and acquisitions to start 2016, but those that have taken place are much larger in terms of value, according to one industry analyst.
A May 3 report from Health Care M&A News reported a 7 percent decrease in overall volume of deals for the first quarter of 2016 when compared to both the previous quarter and the same quarter of 2015. But the combined spending ballooned to $79.5 billion, an 87 percent increase when compared to the final quarter of 2015.
In terms of volume, hospital services accounted for much of the decline, falling 14 percent, while technology deals increased 9 percent when compared to 2015’s final quarter.
“The slowdown in deal volume in the first quarter of 2016 might simply be fatigue setting in after a record-setting year in 2015,” said Lisa E. Phillips, editor of Health Care M&A News. “Also, some buyers are still figuring out where the best opportunities are, as the shift to value-based reimbursements gains momentum.”
For 2016, the trend of big money deals continued into April, with news of Abbott Laboratories’ $25 billion acquisition of St. Jude Medical. The deal was the largest of three recent agreements and signals the industry’s continued consolidation.
Nicholas joined TriMed in 2016 as the managing editor of the Chicago office. After receiving his master’s from Roosevelt University, he worked in various writing/editing roles for magazines ranging in topic from billiards to metallurgy. Currently on Chicago’s north side, Nicholas keeps busy by running, reading and talking to his two cats.