Health-care dealmaking decreased in May under the pressure of record-setting inflation.
The number of completed or announced mergers and acquisitions was 154 in the month, down from 176 in April. The May total also marked a sharp drop from January, which saw 274 transactions.
Overall economic trends and supply chain issues point to a slowdown in transaction activity in many areas of the economy, but the health-care industry has unique characteristics that could support robust deal volume, said Gary Herschman of Epstein Becker & Green in Newark, N.J.
These include a large amount of “dry powder” in the hands of investors, and the sector’s tendency to be recession-proof, he said.
“This could result in increased health-care transaction activity in the short-term as investors may seek to utilize funds for acquisitions before interest rates potentially spike much higher over the next 12 months or more,” Herschman said.
The busiest sectors in May were life sciences, medical devices, health-care IT, and physicians services, each of which easily surpassed 100 deals so far in 2022 and are likely to lead the pack through the rest of the year, analysts say. …
Deal volume in the healthcare IT and software sector remained strong despite national and global economic trends, said Anjana Patel of Epstein Becker & Green.
“Investors continue to see huge potential long-term windfalls from investing in technology capable of delivering and monitoring care across multiple virtual settings,” she said.
Deal volume for home-health and hospice transactions dipped in May, but overall investor interest remains strong due to expected demand from an aging population, she said. …
One notable deal in the subsector was the announced $255 million acquisition by CONMED Corp. of In2Bones Global Inc., an international maker of medical devices designed to treat extremity injuries, said Timothy McHale of Epstein Becker & Green.