Global Healthcare Deals Quarterly

Global Healthcare Deals Quarterly: Weaker 2012 M&A pace reflects US slowdown

The third quarter of 2012 saw a slower global deals pace. Contributing factors included overhangs related to US healthcare and fiscal policy. However, looking ahead, we find support for an improving M&A outlook as healthcare companies take advantage of historically low interest rates and highly receptive capital markets to introduce or expand international revenue streams in an effort to maintain or bolster financial health.

In particular, we found an important shift in sentiment towards globalisation emerging among the historically insular payers and providers.

Notable market developments include:

• Through September 30, 2012 deal value and volume have declined 13% and 5%, respectively, as compared with the same period in 2011.
• Healthcare slowed faster than the global average, with 9M 2012 deal value and volume down 17% and 9%, respectively.
• Trends have varied significantly by region, with the key driver of underperformance a sharp decline in the US amid health policy, regulatory, and tax uncertainty ahead of the November presidential election. At the other end of the spectrum, China and Brazil continued to post strong growth, and the Russian market recently saw a successful hospital IPO.