2017 Key Highlights

  • Two of the industry’s top three largest transactions in 2017 occurred in the Pharma Business Services segment: Pamplona Capital Management’s announced acquisition of PAREXEL International Corporation, a global biopharmaceutical services provider, for $4.92 billion; and INC Research’s announced merger with inVentiv Health for $4.55 billion, which will lead to the creation of the world’s second largest biopharmaceutical outsourcing provider.
  • Financial sponsors represented 26 percent of total industry volume and 50 percent of value during the year.

2017 Key Trends

  • Total transaction volume in 2017 remained almost constant over 2016, at 460.
  • Private equity backed volume increased 24 percent during this timeframe, from 96 to 119. Strategic volume in 2017 declined six percent over 2016, from 362 to 341.
  • Total transaction value in 2017 stayed nearly the same over 2016, at $30.72 billion.
  • The median revenue multiple improved from 1.9x in 2016 to 2.2x in 2017. The median EBITDA multiple rose from 9.5x to 12.5x, which was close to its 2015 level.
  • The combined Pharma IT, Pharma Business Services, and Pharma Information segments experienced a 16 percent increase in volume, from 80 to 93 transactions.

M&A Market Overview

Berkery Noyes tracked 1,370 Healthcare/Pharma Information and Technology transactions between 2015 and 2017, of which 287 disclosed financial terms, and calculated the aggregate value to be $65.55 billion. Based on known transaction values, we project values of 1,083 undisclosed transactions to be $13.09 billion, totaling $78.64 billion worth of transactions tracked over the past three years.

Disclosed median enterprise value multiples for all segments combined in this report during the last 36 months were 2.2x revenue and 13.0x EBITDA.