While the current credit crisis is likely to hinder merger and acquisition (M&A) activity in various sectors of the U.S. economy, some analysts maintain that health care—and particularly the clinical laboratory industry—will continue to be strong this year.

"Despite everything you are seeing in regards to the capital markets and the volatility in the stock market, the smaller transactions, meaning those under $500 million, as opposed to $5 billion or $20 billion transactions, have been impacted much less," said Eric Coburn, a principal with Shattuck Hammond Partners (New York, N.Y.), a firm that has announced or completed 12 health care M&As over the past six months with a combined value of approximately $2.1 billion. "There is financing available for the smaller deals, and from a private equity perspective, [investors] are willing to put in more equity than they typically would, with the thought that when the markets soften up a bit, they will refinance it out."

In terms of lab M&A activity, the market remains strong, Coburn said. "We are seeing both strategic buyers who want to acquire businesses, as well as a variety of private equity firms that do not have investments in the space, [and] labs are high on their radar screen," he added. More coverage on the 2008 outlook for M&A among labs will be featured in the May issue of Laboratory Industry Report.