Healthcare & Life Sciences Industry Overview
There have been over 300 M&A transactions in the healthcare & life sciences (HCLS) industry since the beginning of 2018, worth roughly $140 billion, compared to $239.8 billion for all of 2017. Eighty-seven of these deals were executed by private equity groups.
Notable transactions include the acquisition of Abode Healthcare by Tailwind Management and the acquisition of athenahealth by Elliot Management Corporation.
Public Company Performance
Stock prices grew slightly for many HCLS companies during the past three months, as the value of the S&P 500 declined slightly over the same period. In fact, the Harris Williams HCLS Composite Index grew 2.3%, while the S&P declined 0.3%. Notable exceptions to this trend include dental products (decreased 19.1%), physician practice management (decreased 16.6%), retail pharmacy (decreased 9.4%), medical supplies and distribution (decreased 9.3%), and disease management (decreased 9.1%).
Over the past 12 months industry-wide growth looks much stronger, with the HCLS Composite Index achieving an 8.2% increase. At the category level, payor, provider and pharmacy support services stock prices grew by 18.6% over the past 12 months, followed by provider-based services at 17.9% and products and devices at 5.1%. Specific stock price growth leaders over the past year include diagnostic imaging (47.7%); home care, hospice and home infusion (44.3%); specialty pharmacy (37.3%) and surgicenters / rehabilitation(36.6%).
A new rule issued by the Trump Administration will allow small businesses to create entities known as health association plans to help cut costs. However, they may also reduce benefits. Amazon, J.P. Morgan, and Berkshire Hathaway appointed Dr. Atul Gawande to lead the companies’ joint healthcare venture beginning July 9. And private equity firm KKR & Co. has reached a deal to buy Envision Healthcare for $9.9 billion.
Announced Healthcare & Life Sciences M&A
Healthcare And Life Sciences M&A Trends
Announced Private Equity M&A Activity
Equity Markets Overview
Healthcare And Life Sciences Industry Stock Performance1
Top Equity Offerings2
What We’ve Been Reading
Government | New Trump Rule Rolls Back Protections Of The ACA
A sweeping new rule issued by the Trump administration will make it easier for small businesses to join forces and set up health insurance plans that circumvent many requirements of the Affordable Care Act, cutting costs but also reducing benefits. President Trump, speaking at a 75th-anniversary celebration of the National Federation of Independent Business, said the new rule would allow small businesses to “escape some of Obamacare’s most burdensome mandates” by creating new entities known as association health plans.
Economy | Amazon, J.P. Morgan, Berkshire Hathaway Appoint JV CEO
Dr. Atul Gawande will lead the joint healthcare venture between Amazon, J.P. Morgan, and Berkshire Hathaway beginning July 9. He currently practices general and endocrine surgery at Brigham and Women's Hospital and is a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School. Berkshire Hathaway CEO Warren Buffett, J.P. Morgan CEO Jamie Dimon, and Amazon CEO Jeff Bezos announced a partnership in January to tackle rising healthcare costs. They will form a new company for the venture, which will be headquartered in Boston, a hub for biotechnology and medical research.
M&A | KKR To Acquire Envision Healthcare For $9.9 Billion
Private equity firm KKR & Co. has reached a deal to buy Envision Healthcare, a provider of services to hospitals, for about $5.5 billion in cash. The all-in price tag makes it one of the largest recent leveraged buyouts, which is valued at $9.9 billion including the assumption of debt. Shares of Envision, which also provides post-acute care and ambulatory-surgery services, have fallen 23% over the past year amid questions about its billing for emergency services and disappointing performance.
Payor, Provider, & Pharmacy Support Services1
Products & Devices1