Health care merger and acquisition activity spending fell by 50% in the first quarter of 2013, according to Irving Levin Associates, Inc. (ILA).
Deal volume was down 33% compared to the previous quarter, with 204 deals announced.
The quarter also dropped 31% from what it was a year ago, according to ILA, when 295 deals were announced in The Health Care M&A Report.
The value for M&A deals also fell 39% when compared to the fourth quarter of 2012, coming in at $14.6 billion during the first quarter of 2013.
While overall healthcare M&A activity declined for the quarter, the home health & hospice sector remained unchanged.
In both the fourth quarter of 2012 and the first quarter of 2013, the home health & hospice sector recorded nine deals, however, this represents a 18% decline from year-ago levels, where there were 11 deals in the first quarter of 2012.
Rehabilitation and managed care saw the biggest quarterly declines, dropping by 86% and 67%, respectively during the first quarter of 2013.
So far in 2013, rehabilitation has recorded one deal, compared to the seven announced in the previous quarter. Managed care has recorded two deals in 2013 thus far, compared to the six announced in the previous quarter.
“Overall, the health care merger and acquisition market is doing smaller, more strategic deals while it waits for the economy to improve and the results of the sequester to settle in,” said Lisa E. Phillips, editor of The Heath Care M&A Report. “Deal-making activity seemed to be picking up towards the end of the quarter, so we expect more positive results in the second quarter.”
The number of announced healthcare M&A transactions in 2012 (1,063) was the highest since 2007, notes ILA, however, the dollar value of those deals was the lowest since 2003, coming in at $143.3 billion.
Written by Jason Oliva