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Healthcare M&A: Big deals getting all the attention

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2014 has to go down as the year of the big announcement (it may also be remembered as the year of the failed Pfizer bid for AstraZeneca). One might think these mega deals are crowding out middle market activity. But that’s only true in the newspapers.

In fact, there have been over 1,000 healthcare deals (excluding healthcare providers and facilities) announced globally so far in 2014, including over 500 in the US. This is running at about the same pace in the US as 2013 (961 full year), 2012 (975 full year), 2011 (983 full year)… You’ve got to go back to the recession year of 2009 to find a year where there were fewer than 750 healthcare deals announced in the US. So while the dollar amounts so far in 2014 are staggering ($164 billion for US targets YTD 2014, up from $90 to $100 billion for the full year in 2012 and 2013), deal volume in healthcare is remarkably steady.

Big Announcements – Large Global Deals Announced in 2014

  • Pfizer / AstraZeneca ($119 billion – withdrawn)
  • Valeant / Allergan ($54 billion)
  • Actavis / Forest Labs ($24 billion)
  • Novartis / GlaxoSmithKline ($14 billion for certain GSK assets)
  • Bayer / Merck ($14 billion for certain Merck assets)
  • Zimmer / LVB ($14 billion)

So, while there have been 15 deals in the $1 billion+ club announced in the US so far this year, for every Valeant / Allergan announcement, there are dozens of smaller deals that don’t command the newsprint of the big deals.  We estimate there have been 400 deals under $100 million announced in US healthcare so far this year, excluding facilities and providers – of which there have been nearly 200. Middle-market transactions in 2014 include technology deals such as Nuance’s acquisition of AccelaRAD (medical image cloud computing) and Perficient’s acquisition of BioPharm Systems, an IT consulting company focused on the life sciences industry. Middle-market healthcare transactions also include orthopedic products companies such as Solana Surgical, acquired by Wright Medical for $84.8 million in cash and stock on in January, and CardioNet’s acquisition of the cardiac event monitoring business of Biomedical Systems Corporation for $8.6 million.

Mirus has middle-market M&A experience in medical imaging / CAD, healthcare IT, healthcare equipment, healthcare services, and in a variety of other healthcare sectors. We welcome discussing your company’s goals and strategies to optimize value in this strong healthcare M&A market.