What’s Next for Managed Care?

by | Feb 24, 2017 8:38 pm | Managed Care, Physician Medical Groups, Private Equity

The managed care mega-deals of 2015 have blown up. Aetna (NYSE: AET) and Humana (NYSE: HUM) amicably terminated their $37 billion merger, following a federal judge’s order in January to block the deal on antitrust grounds. The $1 billion termination fee was in the works. A different federal judge blocked Anthem (NYSE: ANTM) and Cigna’s (NYSE: CI) $54.2 billion merger on similar grounds. Things turned ugly quickly, as Cigna declared the deal dead and sued Anthem for the $1.85 billion termination fee, and another $13 billion in damages on behalf of its shareholders. Anthem says it will go ahead with the merger. What do the Big Five health insurers do now that they’re... Read More »

Managed Care Deals Deflate in 2016

by | Dec 21, 2016 8:00 am | Managed Care

As the end of the year approaches, the Managed Care sector hasn’t changed its sluggish pace. Just 20 deals have been announced through mid-December, a 56% drop from 2015’s total of 45 transactions. Spending is another matter. As of this writing, nearly $1.7 billion has been committed to financing the 20 deals. There is no way to match last year’s outrageous total of $100.4 billion, courtesy of the two super-mega-deals from Aetna (NYSE: AET) and Anthem (NYSE: ANTM), made for Humana (NYSE: HUM, $37 billion) and Cigna (NYSE: CI, $54 billion), respectively. You’ve been living under a rock if you haven’t heard that the Justice Department challenged those mergers back in... Read More »

WellCare Health Adds Universal American for $800 Million

by | Nov 22, 2016 7:26 pm | Managed Care

WellCare Health Plan (NYSE: WCG) breathed a little life into the lethargic Managed Care sector, which has experienced a lull in M&A this year. WellCare provides government-sponsored managed care services, and its target, Universal American Corp. (NYSE: UAM), provides health insurance and managed care products and services to Medicare and Medicaid customers in the United States. The purchase price is $800 million, or $10.00 per share, representing a 34% premium to Universal American’s 60-day volume-weighted average closing stock price as of November 16, 2016, and includes the retirement of Universal American’s preferred shares and its convertible debt. WellCare expects the... Read More »

Preliminary Data: Q3 M and A

by | Sep 23, 2016 6:54 pm | Healthcare Market Updates

There’s still one week left to go in the month of September, and the third quarter, but the trends have already established themselves. Merger and acquisition activity in health care dropped 20% compared with the previous quarter, down to 331 deals compared with 415 in Q2:16. The third quarter also pales in comparison to the same quarter a year earlier, when 411 deals were posted (-19%). Even with a week to go, it’s obvious that deal making has slowed considerably and likely won’t recover to those levels. Spending was also much lower than in the previous quarter, and the year-ago period. At the moment, $45.9 billion is on the books for Q3:16, down 48% compared with... Read More »

Third Quarter 2016 Shows Signs of Slowing

by | Sep 6, 2016 4:18 pm | Managed Care, Pharmaceuticals, Private Equity

Eight months into the year is a good time to take stock of the state of the healthcare M&A market. On the whole, volume and value look to be stronger than last year. The first eight months of 2016 show a combined total of 1,019 transactions, compared with 1,005 in the same period in 2015, a 1% difference. Five of the first eight months in 2016 have posted higher transaction totals than the same months in 2015. Deal values have to be examined more closely, owing to the mega-deals that can create huge month-to-month fluctuations. Total dollars spent in the first eight months of 2016 are approximately $196 billion. In the same period in 2015, spending reached nearly $338 billion, thanks... Read More »