Health Care Deals Thrive, but Dealmakers Predict Significant Slowdown in Future Activity
Expectations for M&A in the health care industry have plummeted over the last year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). Dealmakers polled in March gave the sector a 3-month composite score of 53.2 and a slightly higher 12-month composite score of 59.8. (See related chart).
A year ago, they gave health care a 3-month score of 91.2, the highest ranking ever received on the MMP for any sector. As recently as August, transaction pros gave health care a 3-month score of 78.1. In recent years, consolidation in the sector has been driven by the Affordable Care Act, as providers have been under pressure to achieve cost efficiencies. Over time, the impact of ACA is expected to lessen. Some poll respondents expressed uncertainty about the future of the ACA, due to the upcoming presidential election.
The MMP is a forward-looking sentiment indicator, derived from monthly surveys of approximately 250 executives and published in partnership with RSM LLP (formerly McGladrey). Other sectors covered by the MMP include: Consumer goods and retail; energy; technology, media & telecommunications (TMT); financial services, insurance and real estate (FIRE); and manufacturing.