Despite being a defensive sector, the North American Pharma & Life Sciences industry was not immune to the general slowdown in M&A activity seen in the second half of 2011 (2H 2011). The deceleration was the result of three primary contributing factors playing on the capital markets:
The 163 announced transactions in 2H 2011 amounted to a 10% decrease from 1H 2011’s 181 deals. Even with this moderate decline spanning July to December, the year saw an overall 27% increase in the number of transactions over 2010’s, capping off at 343 compared to 270.
Softness in the debt markets was clearly evidenced by the sharp decline in deal value to $36.6 billion in 2H, a 43% decrease from 1H 2011’s $64 billion and a 26% decrease from the same period in 2010. The period featured only a handful of deals valued over $1 billion, three of which were driven by financial investors.