Healthcare and pharma sector sees surge in high-value deals: Report

The pharma and healthcare sector witnessed a decline in deal volumes in Q3 2023, with 26 deals totalling $2.7 billion, down 32 per cent from the same period in 2022 according to the Grant Thornton Bharat Pharma and Healthcare Dealtracker Report. However, deal values increased by 298 per cent year-on-year, due to two high-value deals valued over $650 million each and four deals valued over $100 million each.

Comparing Q3 2023 to Q2 2023, there was a decline in both deal volumes and values by 26 per cent and 14 per cent, respectively. This decrease was largely attributed to a marquee deal in the previous quarter – Temasek Holdings' $2 billion investment in Manipal Health Enterprises. Excluding this deal, Q3 2023 witnessed a 138 per cent increase in deal values.

 

The M&A (Mergers and Acquisitions) sector showcased resilience and recorded a 161 per cent increase in values, despite a 50 per cent decline in volumes compared to Q2 2023. This decline in volumes was largely due to a single multi-million dollar deal, namely Nirma's acquisition of a 75 per cent stake in Glenmark Life Science for $689 million. This single transaction alone accounted for 54 per cent of the values in the M&A space during the quarter.

Top M&A deals of the quarter

Acquirer	Target	USD million
Nirma	Glenmark Life Sciences	698
Manipal Health Enterprises Ltd	AMRI Hospitals	280
IHH Healthcare Bhd- Gleneagles Development Pvt Ltd	Ravindranath GE Medical Associates Pvt Ltd	90
Syngene International Ltd	Stelis Biopharma Pvt Ltd's Bangalore manufacturing unit	86
Asia Healthcare	Asian Institute of Nephrology and Urology	73

Source - Grant Thornton Bharat Pharma and Healthcare Dealtracker Report

Deals in the cross-border space have been on a declining trend, with the quarter witnessing only one deal in the inbound space. Gleneagles Development's acquisition of Ravindranath GE Medical Associates for $90 million marked the sole cross-border deal during this period.

The Private Equity (PE) sector experienced a decline in both values and volumes compared to the previous quarter. However, when compared to Q3 2022, this quarter accounted for a 147 per cent increase in deal values. This growth persisted even after a 44 per cent decline in volumes, due to high-value deals in Q3 2023, driving the average deal size to $80 million.

Top PE deals of the quarter

Investor	Investee	USD million
BPEA EQT	Indira IVF Hospital Pvt Ltd	657
Temasek Holdings, TPG, Prosus, CDPQ, Eight Roads, LGT, ADQ, Amansa, OrbiMed and angel investors	API Holdings Pvt Ltd- Axelia Solutions Pvt Ltd- Pharmeasy	244
India Resurgence Fund - Synthimed Labs	Ind-Swift Laboratories	201
Quadria Capital	Maxivision Super Speciality Eye Hospital	159
TPG Growth and Temasek	Dr. Agarwal's Healthcare Ltd	80

Source - Grant Thornton Bharat Pharma and Healthcare Dealtracker Report

Overall Deal Value Overview

	Q2 2023	Q3 2023
Domestic	467	1,179
Inbound	20	90
Outbound	-	-
Total M&A	487	1,269
PE	2,650	1,442
Grand Total	3,137	2,711

Source - Grant Thornton Bharat Pharma and Healthcare Dealtracker Report