April 25, 2018

1Q healthcare M&A deals fall 12% from 2017

The number of healthcare mergers and acquisitions in the services and technology sectors in the first quarter of 2018 was down 12 percent compared with the same quarter the year before, according to new figures from HealthCareMandA.com, part of Norwalk's Irving Levin Associates.

There were 386 deals during the quarter, down from 439 in the first quarter of 2017.

However, the value of those was up by 90 percent, reaching $112.9 billion, versus the $59.6 billion reported in first quarter 2017.

Deal value rose due to Bloomfield insurer Cigna's announced plans to acquire Express Scripts.

"The first quarter was dominated by Cigna's announced acquisition of Express Scripts, for $67 billion," said Lisa E. Phillips, editor of HealthCareMandA.com. "That followed CVS Health's $77 billion deal for Aetna, announced in the fourth quarter of 2017. Although Cigna's deal certainly increased spending in the first quarter, the deal isn't the game-changer that we're expecting if the CVS/Aetna merger goes forward."

The real disruption in 2018 could come from the talks between retail giant Walmart and Humana, reported in March 2018 by The Wall Street Journal, she said.

"If that deal closes, U.S. health care becomes a retail product, and delivery of non-urgent care moves from the emergency room to Main Street," Phillips said.

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