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Current Diagnostics Merger & Acquisition Trends

by | Nov 28, 2022 | News, Open Content

M&A deals in the diagnostics industry have been lower in number, but higher in impact in recent months.

Merger and acquisition (M&A) deals involving labs and diagnostics companies have been noticeably down in volume during 2022. However, the deals that have come to fruition have tended to be larger in impact and value. Thus, two of the only nine M&A transactions in the diagnostics space that were announced or closed in November were billion-dollar deals, including:

  • Thermo Fisher Scientific’s agreement to acquire UK-based specialty diagnostics company The Binding Site Group for £2.25 billion ($2.60 billion) in cash; and
  • Barcelona, Spain-based Werfen’s acquisition of transfusion and transplant diagnostics firm Immucor for $2 billion.

The trend of lower M&A deal numbers and higher deal impact is consistent with what’s taking place across the wider healthcare industry. According to a report from financial advisory firm Kaufman Hall, there were only 10 hospital and health system M&A transactions in the third quarter of 2022, more than the seven posted in the same quarter last year, but still nowhere near the 19 posted in 2020 or the 25 in 2019. However, the $8.3 billion in total value of the deals that were made was the second highest for a third quarter in seven years:

Hospital & Health System M&A During Financial Third Quarter, 2016 – 2022

YearTotal DealsTotal Deal Value
202210$8.3 billion
20217$5.2 billion
202019$7.4 billion
201925$8.1 billion
201819$10.8 billion
201726$7.6 billion
201624$6.6 billion
Source: Kaufman Hall, M&A Quarterly Activity Report: Q3 2022, Transactions Between Hospitals and Health Systems.

Consolidation and acquisition of hospitals by healthcare systems has come under fire for reducing competition and care quality and leaving many communities without adequate access, particularly in rural areas. In 2021, President Biden issued an executive order calling on the US Departments of Justice and Commerce to crack down on hospital and health insurance consolidation. (See, “Biden Orders Feds to Target Health Care Consolidation but Deals Continue,” LIR, August 26, 2021.)

See the full version of this article in the December 2022 Laboratory Industry Report.