Berkery Noyes, an independent mid-market investment bank, has released its first half 2012 mergers and acquisitions trend report for the healthcare/pharma information and technology Industry.
The report analyzes M&A activity for the sector over the first half of 2012 and compares it with activity in the four previous six-month periods. This market includes information and technology companies servicing pharmaceutical, healthcare payer and healthcare provider companies.
According to the report, transaction volume increased 28%, while transaction value decreased 14%. The largest overall industry transaction was Veritas Capital Partners' acquisition of Thomson Reuters' Healthcare Business, a subsidiary of Thomson Reuters, for $1.25 billion. Verisk Analytics' announced acquisition of MediConnect Global for $324 million was one of the largest transactions in the healthcare IT segment, which saw a 23% increase in volume compared to the second half of 2011.
In terms of transaction type, 27% of industry deals were financed by private equity, venture capital and other investment firms, a 7% increase over the second half of 2011.
“The overall deal flow showed in general more transactions but smaller enterprise value deals getting done,” said Tom O'Connor, managing director at Berkery Noyes. “The current market, due to large macro/regulatory changes in healthcare and a massive shift to electronic solutions, presents a very favorable climate for sellers with unique offerings, scale and profitability that are looking to capitalize on the high level of interest in healthcare information and technology solutions."
M&A activity across all of the pharma segments in the report increased 86% compared to the last half-year period. Many pharmaceutical and biotech companies are dealing with the expiration of patents and are looking for new technologies to supplement their existing R&D efforts.
"Life science organizations are placing a lot of importance on cloud and SaaS models to improve planning and enrollment services related to their clinical projects," said Jeffrey Smith, managing director at Berkery Noyes. "Oracle's announced acquisition of ClearTrial and IMS Health's acquisition of DecisionView were two especially notable software transactions pertaining to drug development and clinical trials in the first half of 2012."
Berkery Noyes specializes in structuring debt and equity transactions in the $25 million to $500 million range, combining independent strategic research and industry intelligence with senior information technology banking expertise.