7 things to know about Q1 healthcare M&A

Overall in the first quarter of 2015, healthcare deal volume was up 19 percent and disclosed value was up 92 percent compared to the first quarter of 2014, according to the "PwC Health Service Deals" report. Here are seven things to know about merger and acquisition activity in the first quarter of this year.

1. Hospital M&A activity in the first quarter of this year was slightly down compared to the first quarter of 2014. There were 23 total hospital transactions in the first quarter of 2015, compared to 25 in the first quarter of 2014. But, deal value was up from $608 million in the first quarter of 2014 to $693 million in the first quarter of this year, an increase of almost 14 percent.

2. A growing trend shows a shift away from traditional mergers and acquisitions toward affiliations, joint ventures and partnerships, according to the report.

3. Managed care had a significant amount of deals in the first quarter of 2015 with a total value announced of $15 million. The true value is much higher as most of the 10 deals announced did not disclose a value.   

4. The 10 managed care deals announced for the first quarter of this year is double the amount of transactions in the prior year period.

5. The first quarter of this year matched the prior year period when it comes to post-acute care deals; both quarters had 65 deals. But, the published deal value dropped significantly from $5.7 billion in the first quarter of 2014 to $1.7 billion.

6. Deals were down in the home health and rehabilitation sector with 16 deals, compared to 19 deals in the first quarter of 2014. In spite of the dip in deals, value was more than double, largely driven by Extendicare's $83 million acquisition of several home health branches.

7. Physician practice deal activity nearly doubled with 21 deals in the first quarter of this year compared to 13 deals in the first quarter of last year. This quarter of all of the deals announced, 18 were led by physician practice management companies. Hospital and health system practice acquisition appears to be slowing, but practice management companies show no such signs, according to the report. Anesthesia groups accounted for 6 of the deals announced this quarter.

More articles on transactions and valuation issues:
Hackensack, Meridian sign merger agreement: 6 things to know
Fromer Eye Center to open in New York
SCA Q1 revenues leap 21.5%: 7 insights

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Top 40 Articles from the Past 6 Months