The hospital acquisition market declined in the fourth quarter of 2015, falling 31% from the third quarter’s total of 32 deals. The 22 publicly announced hospital acquisitions in Q4:15 were also 29% lower than the 31 deals announced in the same quarter in 2014.
The largest acquisition in the fourth quarter to come with a disclosed price was the acquisition of Al Noor Hospitals Group plc, based in Abu Dhabi, United Arab Emirates, by the South African hospital operator Mediclinic International Ltd. for $2.3 billion. Al Noor Hospitals Group provides primary, secondary and tertiary care services through its hospitals and medical centers in the UAE. Mediclinic International operates hospitals throughout South Africa, Namibia, Switzerland and the UAE.
“The weaker performance in the fourth quarter was not surprising, given the hit most publicly traded hospital companies’ stocks took, beginning in the third quarter,” commented Lisa E. Phillips, Editor of the Health Care M&A Report, which publishes the data.
With 102 announced acquisitions in this sector for the full year, 2015 posted a 3% increase over 2014 in number of announced hospital acquisitions. “In the United States, big hospital deals were scarce in 2015. Most transactions involved smaller, community-based hospitals,” Phillips stated. This market is expected to remain active in 2016, with consolidation occurring in large and small markets, all under the scrutiny of the Federal Trade Commission.