1st Half 2016 Healthcare Industry Trends

1ST HALF 2016 KEY HIGHLIGHTS

• The largest deal in 1st Half 2016 was healthcare information and technology services company IMS Health’s announced merger with Quintiles Transnational Holdings, a provider of biopharmaceutical development and commercial outsourcing services, for $8.75 billion.
• IMS Health was also the industry’s most active acquirer during the half year period with four transactions. In addition to the Quintiles Transnational merger, this consisted of Privacy Analytics, Dimensions Healthcare, and AlphaImpactRx, Inc.

1ST HALF 2016 KEY TRENDS

• Total transaction volume in 1st Half 2016 increased by three percent over 2nd Half 2015, from 223 to 230.
• Total transaction value in 1st Half 2016 rose by 72 percent over 2nd Half 2015, from $10.44 billion to $17.96 billion.
• If the IMS-Quintiles Transnational merger is excluded, value declined 12 percent during the past three months but still gained 59 percent on a year-over-year basis.
• The median revenue multiple decreased slightly from 3.2x in 2nd Half 2015 to 3.0x in 1st Half 2016. Median value moved downward from $42 million to $18 million.
• The segment with the largest rise in volume in 1st Half 2016 over 2nd Half 2015 was Pharma IT, which more than tripled, from 9 to 31 transactions.

M&A Market Overview

Berkery Noyes tracked 1,066 Healthcare/Pharma Information and Technology transactions between 2014 and 1st Half 2016, of which 218 disclosed financial terms, and calculated the aggregate transaction value to be $40.40 billion. Based on known transaction values, we project values of 848 undisclosed transactions to be $9.18 billion, totaling $49.58 billion worth of transactions tracked over the past two and a half years.

Strategic acquirers during the last 30 months were responsible for 85 percent of volume in the Healthcare IT segment, as opposed to 76 percent of volume for the aggregate industry.