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Second Quarter Health Care M&A Strongest In Years According To New Report From Irving Levin Associates, Inc.

NORWALK, Conn., July 09, 2008 /PRNewswire/ -- According to a new Report from Irving Levin Associates, a total of 265 mergers and acquisitions were announced in the health care industry during the second quarter of 2008, a 19% increase from the 223 deals announced in the prior quarter. Based on preliminary figures, a total of $85.5 billion was committed to fund the second quarter's M&A activity, a 209% increase over the prior quarter's $27.7 billion. It is also a 25% increase over the $68.3 billion spent in Q2:06 and a 39% increase over the $61.3 billion spent in Q2:07. Despite the slow-down in global M&A, activity in the health care industry is robust and on the rise.

                The Health Care M&A Market Second Quarter 2008

                            Dollar Amounts By Sector*

                                         Dollar Amount          Percent of

                                         Second Quarter          Quarter

    Sector                                    2008

    Home Health Care                     $1,658,700,000              2 %

    Hospitals                               644,000,000             <1 %

    Long-Term Care                          361,750,000             <1 %

    Labs, MRI, Dialysis                      29,587,000             <1 %

    Managed Care                             14,500,000             <1 %

    Rehabilitation                            9,500,000             <1 %

    Behavioral Health Care                            0              -

    Physician Medical Groups                          0              -

    Other Services                        2,118,558,000              3 %

       Services subtotal                 $4,807,008,000              6 %

    Medical Devices                     $53,347,291,000             63 %

    Biotechnology                        16,316,388,000             19 %

    Pharmaceuticals                       8,207,938,000              9 %

    e-Health                              2,817,300,000              3 %

       Technology subtotal              $80,688,917,000             94 %

    Total health care                   $85,495,925,000            100 %

       *Preliminary figures

The health care technology segment attracted the largest amount of capital, capturing nearly 95 cents out of every dollar invested in health care M&A. This portion is up from the first quarter when 80 cents out of every health care M&A dollar was spent in the technology sectors.

The number of deals announced in each sector of the health care industry appears in the chart below, along with comparisons to the prior quarter (Q1:08) and the year-ago quarter (Q2:07).

           The Health Care M&A Market Q2:08 - Deal Volume By Sector

                          Q2:08     Q1:08      %      Q2:07        %

    Sector                Deals*    Deals    Change   Deals      Change

    Services Segment:

    Long-Term Care         21        28       -25%      27        -22%

    Physician Groups       12        12         0%       6        100%

    Home Health Care       13        11        18%      18        -28%

    Hospitals              12        10        20%      15        -20%

    Labs, MRI, Dialysis     8        10       -20%      12        -33%

    Managed Care            3         7       -57%       9        -67%

    Rehabilitation          4         6       -33%       4          0%

    Behavioral Health

     Care                   3         3         0%       3          0%

    Other                  34        23        48%      27         26%

      Services Subtotal   110       110         0%     121         -9%

    Technology Segment:

    Medical Devices        51        35         46%     40         28%

    Pharmaceuticals        38        34         12%     39         -3%

    Biotechnology          46        29         59%     37         24%

    e-Health               20        15         33%     15         33%

    Technology Subtotal   155       113         37%    131         18%

    Grand Total           265       223         19%    252          5%

       *Preliminary figures

These results point to a resurgence of interest in health care M&A despite a lackluster start at the beginning of the year. "After a lethargic first quarter, both deal and dollar volume in the health care M&A market surged in the second," stated Sanford Steever, Ph.D., editor of The Health Care M&A Report. "Given the relative absence of financial buyers from the market, a greater number of strategic buyers now feel more confident in entering the market," added Mr. Steever.

The Health Care industry continues to attract more interest from potential deal makers than other sectors of the economy. "The combination of health care and technology is proving irresistible for investors and operators looking to enter the M&A market," commented Stephen M. Monroe, managing editor at Irving Levin Associates. "While sectors such as Medical Devices and Biotechnology are obvious magnets for M&A dollars, so too are technologically-oriented services sectors such as Infusion Therapy and Contract Research Organizations."

"Though not completely insulated from the surrounding economy and its influence, the health care M&A market appears to run on an internal logic of its own and to have access to sufficient capital to make it happen," Mr. Steever summarized. "Deals in health care technology will likely drive the market for the remainder of the year."

For more information on The Health Care M&A Report, or for a subscription to any Irving Levin publications, call 800-248-1668. Irving Levin Associates, Inc., established in 1948, has headquarters in Norwalk, CT and is online at This privately held corporation publishes research reports and newsletters, and maintains merger and acquisition and venture capital databases, on the health care and senior housing markets.

CONTACT: Stephen M. Monroe, Partner, or Sanford B. Steever, Editor,+1-800-248-1668, Fax, +1-203-846-8300, both of Irving Levin Associates,Inc.

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Posted: July 2008