Berkery Noyes, a leading middle market investment bank, has released its 2010 Pharma & Healthcare Information and Technology Industry M&A Trends Report. This report analyzes merger and acquisition activity in 2010 and compares it with activity in the three previous years.
Total transaction value increased by 81 percent over 2009, from $6.43 billion in 2009 to $11.62 billion in 2010. Total transaction volume also increased, with a 13 percent gain over 2009, from 199 in 2009 to 224 in 2010.
Both the median EBITDA and revenue multiples have increased from 2009, with the EBITDA multiple rising 36 percent from 8.1 to 11.0 and the revenue multiple rising 50 percent from 1.2 to 1.9.
Berkery Noyes determined that the nearly one-third of companies sold between 2007 and 2010 received transaction values between $4 million to $20 million.
“The pharma/healthcare information and technology (“HIT”) mergers and acquisitions market was robust in 2010 as buyers looked to acquire rapidly growing companies in highly attractive niches to accelerate their own growth and offer fuller suites of world class products to the dynamic and growing healthcare marketplace,” said Tom O’Connor, Managing Director in Berkery Noyes’ Healthcare and Life Sciences group. “In 2011, we expect to see increased deal flow and attractive prices for sellers from both strategic and financial buyers.”
“Across the healthcare payer, provider, pharmaceutical, and service sectors, industry leaders are acquiring market innovators, and building end to end solutions,” said Jeffery Smith, Managing Director in Berkery Noyes’ Healthcare and Life Sciences group. “The underlying strategy is almost always to deliver higher quality, safer, and cost-effective healthcare.”