The report below gives a good overview of the third quarter M&A activity in the Healthcare Industry Sector. Though Healthcare M&A activity moderated in Q2 2019, several substantial transactions held the quarter securely in line with prior trends. M&A activity for North American based target companies in the Healthcare sector for Q2 2019 included 181 closed deals, according to data published by industry data tracker FactSet.
A notable middle market transaction in the sector closed in June when Varian Medical Systems, Inc. acquired Cancer Treatment Services International, Inc., a portfolio company of TPG Growth LLC, for $283 MM in cash. Cancer Treatment Services International develops and operates cancer treatment facilities and is located in Pittsburgh, PA. Varian Medical Systems is headquartered in Palo Alto, CA and uses X-ray energy to develop new technologies to fight cancer. This transaction broadens Varian Medical Systems’ portfolio of cancer treatment service offerings. The acquisition was funded through Varian Medical Systems’ credit facility and cash on hand. The transaction is expected to increase Varian’s earnings per share during fiscal year 2021 and 2022.
- US consumer prices for medical care commodities, which may impact medical and imaging laboratories’ operational costs for equipment and supplies, decreased 1.5% in June 2019 compared to the same period in 2018.
- US consumer prices for medical care services, an indicator of profitability for medical and imaging laboratories, increased 2.8% in June 2019 compared to the same month in 2018.
- Total US revenue for medical and diagnostic laboratories increased 0.4% in the first quarter of 2019 compared to the previous year.
Posted by Daniel Sirvent.