What’s a synonym for “slowdown?” We’re as tired of writing about monthly deal volume dropping off as you probably are of reading about it. But M&A activity in October 2016 can only be summed up as slackening, declining, decelerating.
Preliminary deal volume is now at the second-lowest level of the year, just 112 transactions. Only January’s deal volume was lower, at 104 transactions. We may have a few additions to October’s total as the fourth quarter grinds on, but it’s not typical to find another 15 deals.
Deal value also dropped off. At $12.8 billion, it ranks as the second-lowest level of spending for the year. July 2016 still holds the honor of being the slowest month for spending, at $5.1 billion.
The services sectors accounted for 62% of the deal volume, which is fairly typical. The Long-Term Care sector, which has been losing ground for some time, slid 9% (20 deals) compared with the previous month, and was down 31% compared with October 2015’s total of 29 deals.
On a brighter note, the Physician Medical Group sector (10 deals) was up 100%, compared with October 2015. With such low monthly volume, the sector still dropped 9% versus September, which had 11 transactions in this sector.
Among the technology sectors, some fared better than others compared with September’s performance, and compared with October 2015 totals. Biotechnology companies are being sought by pharmaceutical companies for their clinical-stage product candidates, as a way to keep product pipelines full or deny rivals a chance at a promising asset. The eHealth sector has a lot of wind in its sales, thanks to the growing need for data analytics and revenue cycle management.
