According to Grant Thornton Bharat’s Pharma Dealtracker report, transaction activity in the pharmaceutical and healthcare sector increased significantly in the second quarter of 2024. There were 55 deals totaling $4.1 billion that were documented, which represents an eight-fold increase in deal values and a ten-percent increase in deal volumes over the prior quarter. Unlike Q1 2024, when there was just one big deal worth $150 million, this spike was mainly caused by 11 high-value agreements totaling $3.4 billion. Additionally, the typical deal size increased significantly from $9.7 million in Q1 to $74 million in Q2.
Despite a big $2 billion deal in the year prior, where Temasek Holdings bought a 41% interest in Manipal Health Enterprises, deal values increased by 57% year over year. In the same period this year, there were 55 deals, up from 37 in Q2 2023, a 49% increase in deals. This suggests a strong and expanding interest in the pharmaceutical and healthcare industries.
The activity of mergers and acquisitions (M&A) increased dramatically, with values increasing 3.8 times to reach $1.4 billion. In Q2 2024, there were 18 M&A agreements, up from 14 in Q1 2024, a 29% increase in volume. The $633 million purchase by Dr. Reddy’s Laboratories of a 100% interest in Northstar Switzerland SARL, which accounted for 46% of the quarter’s overall M&A value, was a noteworthy deal. This transaction demonstrates the noteworthy momentum and high value of the industry’s present M&A activity.
Comparing Q2 2024 to prior quarters, domestic consolidations led in deal numbers, but outbound acquisitions dominated in terms of value, accounting for 74% of the M&A space. Despite concerns about the state of the world economy, this quarter’s outbound deal volumes and values were the second-highest over the previous five years, indicating a strong interest in cross-border investments.
This pattern was reflected in private equity (PE) activity, which showed a 21-fold rise in deal values despite unchanged deal volumes. Larger transactions and an increase in investor confidence drove this boom. Notably, investor interest in the healthtech and medical device sectors has grown, with three deals totaling over $100 million in the healthtech and two deals in the medical device sectors. The largest PE transaction for the quarter was the estimated $843 million investment made by KKR Asian Fund IV in Healthium MedTech, which accounted for 31% of the overall PE value.
In Q2 2024, the pharmaceutical and healthcare industries showed strong growth and dynamic activity, as seen by notable rises in deal prices, volumes, and average deal sizes. This development highlights the sector’s vital role in the larger economic landscape and emphasizes its resilience and attractiveness to both domestic and foreign investors.
SOURCE:
TIMES OF INDIA
