While the number of healthcare mergers and acquisitions deals decreased by 2.5 percent from 2016 to 2017, the overall deal value skyrocketed 145.8 percent to $175.2 billion, according to a recent 2017 year-end report by PricewaterhouseCoopers.
Here are five things to know from the report.
1. Deal volume was the greatest during the first quarter of 2017 (270 deals), while deal value was greatest during the fourth quarter ($99.2 billion).
2. Similar to 2016, long-term care represented the largest sub-sector in terms of deal volume during 2017.
3. Five "megadeals" — deals worth $5 billion or more — took place in 2017, totaling $104.8 billion.
4. Woonsocket, R.I.-based CVS Health's proposed $77 billion megamerger with Aetna accounted for 44 percent of total deal value in 2017, and 78 percent of deal value during the fourth quarter of 2017. The deal was significantly larger than the largest transaction in 2016: Envision Health's $6.7 billion merger with AmSurg.
5. PwC analysts predict the resurgence of megadeals in 2017, specifically the proposed CVS Health-Aetna transaction, may act as a potential catalyst for additional deals as companies attempt to lower drug costs and gain leverage in the industry.
"Q4 2017 transaction activity and the recent tax reform passage presents favorable momentum heading into 2018, where we expect to see continued transaction activity in many of the health services sector. Private Equity interest also continues to be high with additional capital being raised and new entrants entering competitive processes," analysts said.
To access the full report, click here.