Amidst an uncertain regulatory and business environment, the US Health Services industry witnessed over 200 deals for the fourteenth quarter in a row. Although volumes decreased both over prior quarter and year, value increased significantly over prior year. Vertical integration and disruption were key themes, with the Cigna Corporation-Express Scripts Holding Company megadeal accounting for approximately 92% of total deal value, and Amazon, Berkshire Hathaway, and JPMorgan Chase & Co. announcing a healthcare collaboration.
For the fourteenth quarter in a row, M&A volume exceeded 200 deals. However, the quarter’s total of 228 deals was lower than the 2016-2017 quarterly average of 249, and represents a 4.6% decline over prior quarter, and a 17.1% decline over prior year.
Total deal value for the quarter remained elevated, at $72.6 billion, but megadeals have been major drivers of disclosed deal values recently. Excluding Q1 2018’s Cigna Corporation-Express Scripts Holding Company and Q4 2017’s CVS Health Corp.-Aetna Inc megadeals, Q1 2018’s total deal value would have represented a 35.9% decline over prior year, and a 75.7% decline over prior quarter.