M&A practitioners predict significant expansion in health care deals, according to the sixth installment of Mergers & Acquisitions' Mid-Market Pulse (MMP), a forward-looking sentiment indicator, published in partnership with McGladrey LLP. In our second look at health care, it remains the strongest sector measured by the MMP, beating the industry scores for manufacturing, TMT, financial services and energy. (See related graphic.)

The 3-month outlook for health care delivered a composite score of 84.1, the highest score yielded by the MMP so far. Earlier in 2014, the sector earned a score of 82 for the 3-month outlook. In the current survey, the sector outperformed the 75.1 score given to overall M&A in the same timeframe by a wide margin.

The 12-month outlook scores were a bit lower, but the health care composite score of 77.3 still outperformed the 70.8 overall score. The slightly less bullish 12-month perspective suggests that dealmakers expect the pace of expansion in health care M&A to continue at a slower pace, as the industry's transformation by the Affordable Care Act lessens over time.

The MMP is derived from monthly surveys of approximately 250 executives at private equity firms, investment banks, lending institutions and advisory firms in accounting, law and consulting. The results were published in five previous editions: Expansion in Energy M&A Lags Overall Market and Other High-Growth SectorsDealmakers Expect Gains in TMT; M&A in Financial Services to Expand Over Next YearManufacturing M&A Expected to Surge Over Next 12 Months; and Optimism on M&A Activity, Particularly in Health Care.

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