A recent report by PricewaterhouseCoopers finds that mergers and acquisitions activity in the life sciences sector saw a 8.7% boost in the third quarter from the previous quarter.
In other words, number of deals increased to 25 from 23 across the pharmaceutical, biotechnology, medical devices and diagnostics industries. Deal value jumped 50.8% in the same period – in the second quarter of the year, the 23 deals were worth $12.1 billion, while in the third quarter the deal value had increased to $18.3 billion. The report only includes deals whose value was at least $15 million.
The medical devices industry was a particular bright spot in terms of M&A activity. In the third quarter, the value of medical device deals increased to $14.6 billion, up from $2.1 billion in the second quarter of the year, and up from $922 million in the third quarter of last year.
Two deals spurred the industry to new highs. One was Baxter International’s $4 billion acquisition of Gambro AB, while the second was Valeant’s acquisition of Bausch & Lomb for $8.7 billion.
The report concludes that the fundamentals of deal activity “remain in place” despite scarcity of acquisition targets. However, dealmaking may be hindered by the desire of acquirers to increase the success of each transaction, which will have an effect not only on valuations but also the timeline for deal completion.
Here is a chart that shows how many deals (figures within bars) were done in various industry segments and what their total values were in the last 12 months.
— By Arundhati Parmar, Senior Editor, MD+DI