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Healthcare, pharma M&A activity up 19 percent over 2011

Healthcare IT and pharma M&A activity year-to-date improved 19 percent compared to the first three quarters of 2011, according to a recent report from mid-market investment banking firm Berkery Noyes.

[Also: M&A: What is driving the market?]

The report, “Healthcare/Pharma Information and Technology Industry,” analyzes merger and acquisition activity for the industry during the first three quarters of 2012 and compares it with data covering 2011. This market includes information and technology companies servicing the pharmaceutical, healthcare payer and healthcare provider spaces.

The largest deal in the healthcare IT segment in third quarter 2012 was Roper Industries’ acquisition of Sunquest Information Systems for $1.4 billion, said the report.

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[Also: Healthcare pharma, IT M&A volume up, values down in 2012]

According to the report, while M&A activity year-to-date improved 19 percent compared to the first three quarters of 2011, both transaction volume and value fell 7 percent from second to third quarter 2012.

Despite this blip, the overall outlook for M&A in the healthcare IT sector is strong.

“Legislative incentives continue to increase the velocity of deal flow in the healthcare IT M&A market,” said Jonathan Krieger, managing director at Berkery Noyes, in a press release. “(Government focus) on the interoperability and connectivity of clinical and financial information are heavily dependent on enabling technologies.”

Tom O’Connor, managing director at Berkery Noyes, told Healthcare Finance News that he expects the growth trend in healthcare IT M&A to continue, but said if the economy experiences another downturn, it could have a negative effect.

"Every sector is different but the macro trends are very strong," said O'Connor. "However, if the economy does a deep dive that could be an issue."