Most mergers and acquisitions (M&A) professionals see a positive outlook
for healthcare and life sciences deals next year, even as political
uncertainty will be the biggest factor to upend transactions, according
to a recent Merrill InsightTM poll of global M&A
professionals. Merrill InsightTM is part of Merrill
Corporation, the leading technology provider for M&A professionals
around the world.
According to the poll, which included more than 200 respondents from the
Americas and Europe, the Middle East and Africa (EMEA), 52% of
respondents believe that the M&A market is headed in a positive
direction in the next year. This is a 12% jump from the results of the
November Merrill
InsightTM poll, where 40% of respondents anticipated a
positive outlook and 48% believed the market was headed in a neutral
direction.
“This aligns with the steady stream of transaction activity we are
seeing from our healthcare and life sciences clients,” said Rusty Wiley,
Chief Executive Officer of Merrill Corporation. “The number of projects
we are managing is up almost 12% compared to the same time last year.
The shift to a technology-based business environment is pushing life
sciences and healthcare companies to acquire or form partnerships to
build better data and customer-centric capabilities.”
The positive outlook is tempered by 35% of respondents citing political
uncertainty as the most likely factor to sink healthcare deals in the
next year. This concern came ahead of investor confidence (22%), data
privacy (21%), antitrust / competition (14%) and national security
regulations (6%).
“The healthcare landscape is becoming increasingly difficult for
dealmakers to navigate, as the U.S. enters a major election season and
questions still surround the details of Brexit,” said Wiley. “On top of
this, the healthcare industry is still grappling with how to
operationalize and protect vast amounts of data, as well as how to
attract the technology talent needed to capture that opportunity.”
In fact, respondents said the hardest part of getting a healthcare or
life sciences deal right is talent assessment (35%), followed by data
privacy compliance (22%), and regulatory communications (16%). From a
due diligence standpoint, respondents overwhelmingly said finding all
the red flags (57%) was the hardest part of the process. Predicting
buyer interest at 16% was next, followed by data security and control at
12%.
Other key poll results included:
-
44% of respondents said healthcare IT represented the richest
investment opportunity in the sector, ahead of next generation
sequencing (22%), medical marijuana (20%) and both point of care
delivery and immunotherapy (19%). -
Technology will drive the most opportunity in population health and
precision medicine, according to 25% of respondents. Other areas of
opportunity included diagnostics and devices (24%), biosensors and
trackers (20%), telehealth (18%) and infrastructure and operations
(10%). -
40% of respondents said data connectivity is the greatest obstacle to
harnessing the technology opportunity, followed by technology and
healthcare collaboration (23%), lack of user experience focus (14%),
technology-as-a-cost-center culture (12%) and the technology talent
gap (10%).
For more information on the healthcare outlook, please see the Merrill
Insight™ replay.
The poll results are based on responses from global M&A professionals in
the Americas and Europe, the Middle East and Africa, who participated in
the event.
About Merrill Corporation
Merrill Corporation is a leading global SaaS provider for participants
in the M&A lifecycle. Clients trust Merrill’s innovative applications,
excellent customer service and deep subject matter expertise to
successfully navigate the secure sharing of their most sensitive
content. The company’s flagship platform, DatasiteOne, powers secure,
intelligent due diligence and enterprise collaboration for thousands of
deals in more than 170 countries. For more information, visit http://www.merrillcorp.com.
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