Healthcare M&A update: H2 2020

2020 healthcare M&A finishes strong

Healthcare M&A rebounds

M&A activity plummeted during the second quarter of 2020, as COVID-19 forced shutdowns, largely erased voluntary procedures, and caused liquidity to dry up. M&A slowly began to come back in the 3Q20 before a flurry of end of the year deals. Thanks to a strong fourth quarter, there were 738 reported transactions that closed during the second half of 2020, a strong increase from the 608 transactions during the first half of the year. Those second-half results were also up 8.5% from the same period in 2019, indicating sustained growth.

The aggregate value of M&A deals also jumped in the second half of the year – from $84.5 billion in 1H20 to $109.4 billion in 2H20. Three large acquisitions accounted for the bulk of that increase:

• Gilead bought Immunomedics for $20.4B
• Teladoc bought Livongo for $15.9B
• Bristol-Myers bought MyoKardia for $12.2B

Quarterly U.S. healthcare M&A activity for transactions closed aggregate transaction value and number of deals

Source: S&P Capital IQ

The growth of home healthcare

The pandemic has brought the need for healthcare home. Literally.

In the second half of 2020, the home health & hospice industry was among the fastest growing healthcare segment in the U.S. Throughout the year, home health & hospice and non-acute care significantly outperformed the S&P 500, the only two healthcare segments to do so.

Healthcare providers’ relative market performance