Business

Q2 Sees Surge in Pharma and Healthcare Deals

The most notable M&A deal was Dr Reddy’s Laboratories' acquisition of a 100% stake in Northstar Switzerland SARL for $633 million, making up 46% of the quarter’s total M&A values.

• By Newsdesk
• New Delhi
• Jul 17, 2024

Business

The pharma and healthcare sector saw a notable surge in deal activity in Q2 2024, with 55 deals amounting to $4.1 billion. This represents an eightfold increase in deal values and a 10% rise in volumes compared to the previous quarter, according to the Pharma Dealtracker report by Grant Thornton Bharat. The average deal size jumped from $9.7 million in Q1 2024 to $74 million this quarter, driven by 11 high-value deals totaling $3.4 billion, up from just one high-value deal worth $150 million in Q1 2024.

Year-on-year, deal values increased by 57%, despite a significant $2 billion deal last year by Temasek Holdings for a 41% stake in Manipal Health Enterprises. Deal volumes also saw substantial growth, with a 49% increase to 55 deals this quarter, compared to 37 deals in Q2 2023.

Mergers and acquisitions (M&As) experienced a significant rise, with values increasing 3.8 times to $1.4 billion and volumes up 29%, from 14 deals in Q1 2024 to 18 deals this quarter. The most notable M&A deal was Dr Reddy’s Laboratories' acquisition of a 100% stake in Northstar Switzerland SARL for $633 million, making up 46% of the quarter’s total M&A values. This highlights the increasing momentum and high-value nature of M&A activities in the sector, as noted by Grant Thornton.

Domestic consolidations led in deal volumes, while outbound deals dominated in values, contributing 74% to the M&A space in Q2 2024. This quarter recorded the second-highest quarterly outbound volumes and values in the past five years, indicating strong cross-border investment interest despite global economic uncertainties.

Private equity (PE) activity mirrored this trend, with a 21-fold increase in deal values, while volumes remained steady. This was driven by an increase in large transactions and improved investor confidence. The healthtech and medical devices segments saw growing investor interest, with three deals in healthtech and two in medical devices, each valuing over $100 million. The largest PE deal was KKR Asian Fund IV's $843 million investment in Healthium MedTech, accounting for 31% of the PE value this quarter.