Healthcare M&A delivers promising first quarter

Dealmaking within the PMB sector enjoyed an impressive start as companies across the globe embarked on their post-pandemic recovery

The global pharma, medical and biotech (PMB) sector saw US$95.4 billion in deal activity over the first quarter, almost three times the US$33 billion in deals announced in Q1 2020. Deal volume, meanwhile, increased 28% year on year, with 466 deals announced.

This strong activity is carrying on from the momentum generated by deal activity in H2 2020, reversing the steady 2019 decline. While initially hit hard by the global pandemic, dealmaking within the PMB sector witnessed an impressive rebound over the course of 2020. Global deal value within the sector more than tripled from US$66.4 billion in the first half of the year to US$220.2 billion in the second, while volume increased by 28% over the same time frame.

US deal value tops tables

The US continued to account for the majority of dealmaking activity within the sector, both in terms of value and volume. Total quarterly deal value of US$53.5 billion was more than three times Q1 2020’s value of US$15.9 billion, while the 201 deals struck remained relatively stable year on year—decreasing by just three deals.

The largest deal of the quarter saw Ireland-based clinical trials group ICON agree to acquire US rival contract research organization (CRO) PRA Health Sciences for US$11.5 billion.

“COVID-19 created a platform for change that we cannot ignore,” PRA’s chief and chair Colin Shannon said following the deal. Demand for decentralized and hybrid trial solutions grew amid the pandemic, with both companies now focusing on siteless trials and tech, such as wearables. The deal may spur further consolidation among CROs as they look to meet this growing market demand.

Another deal that saw an Irish firm target a US healthcare firm was Horizon Pharma’s US$2.5 billion takeover of US-based Viela Bio—a spinout of UK-based AstraZeneca. Horizon focuses on developing treatments for rare and rheumatic diseases. The deal, completed in March, adds three clinical-stage drugs targeting inflammatory and autoimmune disease to its R&D pipeline.

SPACs push up US deal value

An increase in activity by special purpose acquisition companies (SPACs) helped push up US deal value. In the first quarter alone, there were four such deals worth US$1 billion or more in the healthcare sector—all targeting US-based firms.

The largest of these deals was the merger between US-listed SPAC VG Acquisition Corp., owned by business magnate Richard Branson, and US-based genetics testing start-up 23andMe. Following completion of the US$3.6 billion deal, the Silicon Valley-based company will list on the New York Stock Exchange (NYSE).

The deal also saw PIPE (private investment in public equity) investment—a group of investors including Branson, Fidelity Management and 23andMe cofounder Anne Wojcicki announced they would invest US$250 million in the merged company.

Another significant SPAC deal of the quarter was the merger between US-listed SPAC Fortress Value Acquisition Corp. II and US-based ATI Physical Therapy, in a deal valued at US$1.5 billion. ATI, backed by PE firm Advent International, is the largest outpatient physical therapy provider in the US. It is reportedly planning to use cash proceeds of up to US$645 million to repay existing debt and fund growth through acquisitions. The deal will also see US$300 million in PIPE investment from Fortress Investment, Wells Capital Management, Weiss Asset Management and Monashee Capital Partners.

UK leads European activity

Western Europe attracted 141 deals in the first quarter—an increase of 27 deals compared to Q1 2020. Deal value, meanwhile, more than doubled year on year—reaching US$29.6 billion in the first quarter.

The UK attracted the most activity, with 37 deals worth US$21.9 billion changing hands in the first quarter—the highest of any quarter in both value and volume on Mergermarket record (since 2006). The UK was home to the highest-valued European deal of the quarter: US pharma wholesaler AmeriSourceBergen’s US$6.5 billion purchase of Walgreens’ European wholesale distribution business, Alliance Healthcare.

France was the second most-targeted country in the region, with a total of 13 deals valued at US$2.6 billion announced in the first quarter. The highest-valued deal was Charterhouse Capital’s US$2.4 billion sale of Cooper Consumer Health to a consortium led by CVC Capital Partners. Cooper Consumer produces over-the-counter (OTC) treatments, such as creams, sprays and nutritional supplements. Demand for such products has increased amid the COVID-19 pandemic.


The burst of dealmaking activity in the first quarter of 2021 solidifies the recovery in deal activity in the sector witnessed at the end of 2020. The healthcare industry will play a pivotal role in the global recovery from the COVID-19 pandemic, with innovative technologies emerging to service changing behaviors, consumer-led demand and growing pressures being placed on healthcare systems across the globe. Forward-thinking companies will continue to attract investment over the course of the year as investors realize value from meeting the needs of a post-pandemic global society.

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