Medical Technology Contract Manufacturing
M&A Review
Fourth Quarter 2009
One year ago, the outlook for the leveraged loan market was uncertain at best, as lenders and borrowers lacked visibility on the direction of economy and the long term impact of government-sponsored stimulus plans. This resulted in a liquidity crunch for even the best credits and a dramatic sell-off in the secondary markets with leveraged loan and high yield bond prices plummeting over 31%. It seemed as if the credit malaise would continue through 2009.
However, government programs such as TARP and TALF provided stability for the financial markets and the impetus for institutions to begin deploying capital, albeit more judiciously than before. Additionally, improved economic visibility helped push secondary levels higher which reduced the dislocation between primary and secondary trading levels and provided issuers with a window of opportunity to come to market. As investors’ appetite for credit increased, investment grade bonds were the first to benefit, followed by high yield bonds and by the end of 2009 the leveraged loan market showed signs of recovery and stability.
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M&A Review
Third Quarter 2009
The economic malaise of the past 18 plus months has severely impacted M&A activity. However, PMCF expects to see an improvement in the M&A environment in 2010 driven primarily by improving economic conditions, greater availability of capital and a decline in the valuation gap between buyers and sellers.
With the economy showing signs of improvement and a rebound in the equity markets (S&P YTD return of 22.6%), it is reasonable to expect lenders will now have the visibility required to resume lending again. Further stability will increase the availability of credit which could spur M&A activity.
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M&A Review
Second Quarter 2009
Medical technology outsourcing M&A activity remained brisk through the second quarter of 2009 with 11 transactions announced/completed, which was in line with the second quarter of 2008. M&A activity is quietly returning to pre-credit crisis levels in contract manufacturing. The fragmented nature of this market significantly reduces the capital needed to consummate many of these transactions.
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M&A Review
First Quarter 2009
The Medical Technology Contract Manufacturing M&A Review from P&M Corporate Finance provides insight into the current state of the industry, including market data related to recent transactions and capital markets activity.
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