AI Magazine Issue 8 2018

56 Acquisition International - Issue 8 2018 The value of mergers and acquisitions (M&A) targeting global healthcare companies reached the highest levels since Q3 2006 in the second quarter of 2018 as volume maintains steady levels recorded since the start of 2017, according to Zephyr, the M&A database published by Bureau van Dijk. here have been 502 deals worth an aggregate USD 31,453 million announced in the healthcare sector in Q2 2018, representing an increase of 3 per cent by volume and 73 per cent by value from 489 deals worth USD 18,168 million in Q1 2018. On a 12-month comparison, value improved at a significantly faster rate, against a decrease of 5 per cent by volume from 528 deals worth USD 11,687 million in Q2 2017. In keeping with this pattern, the value of M&A targeting healthcare businesses in the opening six months of 2018 was the highest recorded since H2 2006 (USD 58,017 million), while volume declined 12 per cent over the period under review to 991 deals worth a combined USD 49,621 million in H1 2018, from 1,124 deals worth USD 30,833 million in H2 2017. The increase by value was again much higher year-on-year, more than doubling from USD 24,360 million invested across 1,077 deals in H1 2017. In total, 13 of the top 20 deals by value targeting global healthcare companies announced so far in 2018 have exceeded USD 1,000 million and together account for 81 per cent of total value for the six months under review. The largest of these deals involved KKR & Co, via its KKR Americas Fund, agreeing to acquire Envision Healthcare of the US for USD 9,900 million. The second- and third-largest deals also featured US targets as HCP Mezzanine Lender said it would pay USD 7,100 million for nursing homes and rehabilitation centre operator HCR Manor Care, while RCCH Healthcare Partners is buying hospital operator LifePoint Health for USD 5,600 million. The fourth-largest healthcare deal signed off in 2018 to date involved Niorpea SGPS acquiring a majority stake in Portuguese hospital and residential homes operators Hospital Nossa Senhora da Arrabida and Porto Salus Azeitao - Residencias Assistidas for USD 3,827 million. Nine of the top 20 deals featured a US-based target and included an inpatient care holding company, a private healthcare support service provider and an ambulatory surgical services group. Unsurprisingly, having featured in the three largest deals of the year so far, North America is leading the regional rankings by both volume and value, with 532 deals worth an aggregate USD 35,405 million signed off in 2018. Western Europe followed with 212 deals worth USD 10,998 million, which in terms of value is almost as much as the USD 11,480 million announced in the full year of 2017. Far East and Central Asia placed third with 201 deals worth USD 6,555 million. In terms of value, investment in each of these regions is almost on par with the entire 2017 timeframe, with five and a half months still to go until the end of 2018. Dealmaking in South and Central America has already exceeded the USD 961 million raised in 2017, with deals worth USD 1,764 million in 2018 to date. Similarly, the Middle East has recorded USD 389 million-worth of deals since the start of the year, an increase of 83 per cent on the USD 212 million notched up in the entirety of 2017. In conclusion, healthcare continues to be a popular destination for M&A dealmaking, with the majority of regions on track to exceed the previous year and value in the first half of 2018 almost exceeding the value of 2017, with five months still to go before the year ends. There have been a large number of sizable investments in the sector and if dealmaking continues on this trajectory, 2018 could prove to be a record-breaking year for M&A in healthcare targets. Company: Bureau van Dijk E-Mail: [email protected] Web: www.bvdinfo.com Healthcare T