Among all sectors of the healthcare industry, the report tracked a total of 255 deals in the third quarter, with a total disclosed value of $38.4 billion. That number included 25 deals involving a private equity buyer and 22 IPOs.
Deal volume is 27% lower than the third quarter of 2012, when there were 350 deals. But total deal value was about 4% higher in the third quarter of 2013 compared with the same period last year.
The number of deals in the third quarter of 2013 was 11.3% greater than the 229 deals in the second quarter of this year. But total deal value declined 23% from the $49.9 billion in the second quarter. The third quarter deal value was still more than three times greater than the $11 billion deal value in the first quarter of this year.
Vendors once again led the pack among the four sectors tracked in the report in terms of total deal volume, with a total of 101 transactions. Coming off an unusually quiet quarter, vendors returned to the deal-making table with a strong interest in software and solutions for electronic health records, practice management and revenue-cycle management.
One major insurance change that spurred dealmaking is the greater amount of cost-sharing in health plans for 2014, whether in health plans sold on the new state insurance exchanges or in employer health plans. That heightened interest in technology to help healthcare providers with billing, claims processing and debt collection.
Two of the five largest vendor deals involved companies that make EHR systems. These involved a private equity buyer that saw a lucrative investment opportunity.
Vista Equity Partners' $644 million acquisition of Greenway Medical Technologies—which the private equity firm plans to roll into portfolio company Vitera Healthcare Solutions—is expected to create one of the largest ambulatory healthcare information technology companies in the country.
Although vendors saw the largest number of deals, pharmaceutical and biotechnology companies commanded the highest prices. With deal value coming in at $24.2 billion, this sector represented 63% of total disclosed deal value for the third quarter.
The largest deal in the life-sciences sector—and for the third quarter overall—was Amgen's $10.4 billion offer for Onyx Pharmaceuticals. Onyx markets three oncology drugs, including its lead product Nexavar, which had worldwide sales of $861 million last year.
The deal doesn't add much to Amgen's pipeline. But it shows that pharmaceutical and biotech companies are willing to pay top dollar for proven products.
Follow Beth Kutscher on Twitter: @MHbkutscher