In theory, national health reform efforts are enough to make any healthcare investor nervous. But as all investors know, big uncertainty can lead to big rewards if you play your cards right--and it seems they're ready to take calculated risks.
Though overall deal activity in the U.S. has fallen substantially, healthcare deal value has climbed from 2007 and 2008. In fact, Healthcare M&A is at an all-time high--both as a percentage of the number of deals and size of the transaction--according to Dealogic. Thanks in part to two big deals, healthcare accounted for almost 30 percent of U.S. mergers in 2009, when calculated by dollar size. Usually healthcare activity runs at about the 10 percent level.
Some of the biggest deals with a healthcare element are technology-related (such as Dell's buyout of Perot Systems) not much of a surprise given the government's drive to push EMRs into medical practices and hospitals. Meanwhile, many pharmas and biotech firms are buying, rather than developing technologies.
Further fueling all of this activity is the fact that banks and bond buyers remain willing to lend money for deals. While healthcare may face many pressures, it's still seen as a growth area for investment, according to financial industry leaders.
To learn more about this trend:
- read this Wall Street Journal piece (reg. req.)
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