RR Donnelley's August 2016 VENUE Market
Spotlight focused on the healthcare industry and the
prospects for M&A activity in that space over the next 12
months. The report notes that there were 678 healthcare
transactions in the first half of 2016 with an aggregate value of
US$171.3 billion globally. These figures represent declines of 5%
and 6%, respectively, from the same period in 2015, though they are
up significantly from 2014, and respondents to the survey indicated
that they expect investments in digital health, biotechnology and
medical devices to increase in the future.
According to the report, global factors driving the health care
industry include the fact that there will be 500 million more
people aged 60 and over by 2030 and that 60% of the world's
population will be considered middle-class by that year, whereas
only 30% were considered as such in 2012.
Respondents to the survey also shared the following opinions on
what they see happening in the healthcare industry over the next 12
64% of respondents believed that digital health is the industry
sub-segment that will see the largest increase in M&A activity,
followed by medical devices (52%); biotechnology (40%);
pharmaceuticals (20%); hospitals and outpatient clinics (16%); and
insurance companies (8%) (respondents were asked to select their
top two choices).
64% of respondents view acquisitions of synergistic technology
or data as the top deal driver, followed by consolidation to reduce
costs (56%); desire to expand into new geographies ($8%); effects
of the U.S. Affordable Care Act (Obamacare) (12%); sales and
divestments to reduce debt burdens (12%); and the low cost of deal
financing (8%) (respondents were asked to select their top two
80% of respondents view regulatory issues as the most
significant barriers and challenge to M&A activity in the
healthcare space, followed by geopolitical and macroecnomic
uncertainty (factors include Brexit and the U.S. presidential
election) (68%); high valuations and low profitability of potential
targets (48%); and a shortage of interested buyers (4%).
52% of respondents see the Asia-Pacific region as the market
which will experience the most M&A activity in the next 12
months, followed by Europe and North America, both at 24%. The
report notes that Asian countries have seen an increase in deal
value from an annual average value of US$15.2 billion in 2007-2013
to US37.8 billion in 2015.
56% of respondents believe that private equity investments in
the healthcare industry will increase only somewhat in the next 12
months, whereas 28% believe it will increase significantly. The
numbers of respondents who felt private equity investments would
remain the same or decrease somewhat were tied at 8%.
52% of respondents believe there will be somewhat of a decrease
in IPO activity in the sector, whereas 8% believe there will be an
increase in such activity. Respondents who believe IPO activity
will stay the same or decrease significantly both equalled
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
While most are well aware that the sale of a business is generally a complex process, even sophisticated business owners are surprised by just how much cost and effort is required to complete the sale.
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