December 2010
Full Year Mergers and Acquisitions Trends Report
IN THIS ISSUE
M&A Market Overview
Figure 1. M&A Market
Dynamics
Figure 2. Median Enterprise
Value Multiples
Transaction Analysis
Figure 3. Bell Curve
Histogram- 2010
Figure 4. Distribution Table-
2010
Strategic vs. Financial Comparison
Figure 5. M&A Dynamics By
Transaction Type - 2010
Figure 6. Transaction Type
Purchaser Analysis
Figure 7. Top Ten Notable
Transactions 2010
Figure 8. Median Enterprise
Value/Revenue Multiples By Size
2007- 2010
Transaction Volume By Online
Figure 9. Transactions by
Market Segment
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PHARMA AND HEALTHCARE
INFORMATION AND TECHNOLOGY INDUSTRY
2010 Key Highlights
• The largest transaction in 2010 was the
merger of Allscripts-Misys Healthcare
Solutions, Inc. with Eclipsys Corporation
for $1.27 billion.
• UnitedHealth Group was the most active
acquirer by volume, with five acquisitions:
A-Life Medical, Inc., Axolotl Corporation,
Executive Health Resources, Inc., Picis,
Inc. and QualityMetric, Inc.
• There were 53 financially sponsored
transactions in 2010, with an aggregate
value of $2.87 billion, representing
24 percent of the total volume and 39
percent of the total value, respectively.
Figure 2. 2007 - 2010 value and volume comparison.
2010 Key Trends
• Total transaction volume increased by 13 percent over 2009, from 199 in 2009 to 224 in
2010.
• Total transaction value increased by 81 percent over 2009, from $6.43 billion in 2009 to
$11.62 billion in 2010.
• Both the median EBITDA and revenue multiples have increased from 2009, with the
EBITDA multiple rising 36 percent from 8.1 to 11.0 and the revenue multiple rising 50
percent from 1.2 to 1.9.
M&A Market Overview
Berkery Noyes tracked 825 transactions
between 2007 and 2010 of which 302
disclosed financial terms, and calculated
the aggregate transaction value to
be $28.80 billion. Based on known
transaction values, we project values of
523 undisclosed transactions to be $7.97
billion totaling $36.77 billion worth of
transactions tracked over the past four
years.
The largest transaction tracked by Berkery
Noyes between 2007 and 2010 was TPG
Capital and CPP Investment Board’s
acquisition of IMS Health Incorporated for
$4.01 billion announced in November 2009.
Berkery Noyes determined that the nearly
one-third of companies sold between 2007 Figure 2. 2007 - 2010 median: Value, Revenue, EBITDA comparison.
and 2010 received transaction values
between $4 million to $20 million.
Presented by Berkery Noyes
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 TRANSACTION ANALYSIS | Jan. 1, 2010 - Dec. 31, 2010
Distribution Table
Value in MM Known Projected Total Cumulative
%
US$ Number Number Number %
$0.2 1 0 1 1% 1%
$0.4 3 0 3 4% 5%
$0.6 3 0 3 4% 9%
$1.0 3 0 3 4% 13 %
$1.6 5 2 6 7% 20 %
$2.7 4 5 8 5% 25 %
$4.5 4 11 14 5% 31 %
$7.4 9 20 28 12 % 43 %
$12.2 11 27 38 15 % 57 %
$20.1 8 30 37 11 % 68 %
$33.1 1 25 26 1% 69 %
$54.6 5 16 21 7% 76 %
$90.0 3 8 11 4% 80 %
$148.4 5 3 8 7% 87 %
$244.7 4 1 5 5% 92 %
$403.4 2 0 2 3% 95 %
$665.1 2 0 2 3% 97 %
$1,096.6 2 0 2 3% 100 %
Total # 75 149 224
Figure 3. Shows distribution of transactions among the pharma and health-
Total $ Value $8,881 $2,742 $11,623
care information and technology industry transactions based on publicly avail-
able information and Berkery Noyes estimates. Using a logarithmic scale, we Middle 3rd of Industry Middle 2/3rds of Industry
determined that nearly one third of companies purchased had transaction
values of $7.4 million to $20.1 million. Based on this data, we estimate the
total transaction value of deals done from Jan. 1 to Dec. 31, 2010 at $11.6
Figure 4. Presents the data depicted in the bell curve-histogram.
billion. note: The projected number column is rounded as a result of the projection
and may produce insignificant errors in the total sum.
* Indicates largest transaction in the industry from Jan. 1 through Dec. 31, 2010.

STRATEGIC VS FINANCIAL COMPARISON

Figure 5. 2010 value and volume comparison by acquirer type. Figure 6. Presents acquirer type distribution by year.

note: Financial transactions are those financed by private equity,

venture capital, and other investment firms. This includes acquisitions by
portfolio companies of the investment firms.

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 PURCHASER ANALYSIS

Top Ten Notable Transactions 2010

Value MM
Deal Date Target Name Buyer
US$
Allscripts-Misys Healthcare
06/09/10 Eclipsys Corporation $1,273
Solutions, Inc.
05/06/10 inVentiv Health, Inc. Thomas H. Lee Partners, L.P. $911
04/16/10 Phase Forward Oracle Corporation $699
06/09/10 Healthcare Solutions Holding Cardinal Health, Inc. $517
12/07/10 Medicity Inc. Aetna Inc. $500
05/17/10 Virtual Radiologic Corporation Providence Equity Partners $282
07/28/10 Health Grades, Inc. Vestar Capital Partners $250
11/08/10 PHNS The ConJoin Group $250
Executive Health Resources,
08/04/10 Ingenix, Inc. N/A
Inc.
07/22/10 Picis, Inc. Ingenix, Inc. N/A
2010 Aggregate Transaction Value $11,623
Top 8 Aggregate Transaction Value $4,681
Top 8 Aggregate Value as a Percentage of All Transactions 40 %

Figure 7. Lists the top ten transactions for 2010 and calculates their
aggregate transaction value as a percentage of the 2010 total aggregate Figure 8. Presents the median enterprise value/revenue multiples paid
transaction value as shown on Figure 1 & 4. for companies in the pharma and healthcare information and technology
note: Transaction data based on announced date. industry from 2007 to 2010 based on publicly available sales price and
revenue data.
N/A: If the price is listed as N/A, berkery Noyes did not calculate that value
into the aggregate.

TRANSACTION VOLUME BY SEGMENT | Jan. 1, 2007 - Dec. 31, 2010

Figure 9. Presents the transaction volume by target segment within the pharma and healthcare information and technology
industry.

©2011 Berkery Noyes

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The DNA of M&A

All charts in this report are based

on data gathered by Berkery Noyes
research department. All time
period statistics are based on the
transaction announcement date. THOMAS P. O’CONNOR | Managing Director, Healthcare/Life Sciences Group
For current intelligence on Merger JEFFREY SMITH | Managing Director, Healthcare/Life Sciences Group
and Acquisition activity in the
Information Industry please visit JOESEPH BERKERY | Chief Executive Officer
our online service at
www.mandasoft.com
JOHN SHEA | Chief Operating Officer

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©2011 Berkery Noyes

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