Healthcare M&A Held Steady in 2017

Healthcare merger and acquisition activity held steady in the fourth quarter of 2017. Compared with the third quarter, deal volume increased 1%, to 377 transactions. Deal volume was lower than the same quarter in 2016, down 3%. Combined spending reached $114.4 billion, up 166% compared with the $43.1 billion spent in the previous quarter, according to Fourth quarter deal value was 197% higher than the $38.6 billion spent in Q4:16.

Health Care M&A Market – Deal Volume by Sector

Behavioral Health Care1214-14%1020%
Home Health & Hospice13128%24-46%
Laboratories, MRI & Dialysis16157%978%
Long-Term Care7074-5%93-25%
Managed Care10825%4150%
Physician Medical Groups3243-26%2814%
   Services subtotal236249-5%247-4%
Medical Devices282322%2322%
   Technology subtotal14112414%142-1%
Grand Total3773731%389-3%

Source:, January 2018

Deal volume for the full year 2017 reached 1,566 transactions, down 2% compared with 1,593 transactions in 2016. Dollar volume was more robust, up 23% compared with 2016, to $315.3 billion.

 Healthcare services transactions made up 63% of the quarter’s deal volume, and an unusually strong 87% of the quarter’s dollar volume ($99.4 billion). The spending surge is the result of the $77 billion CVS Health/Aetna announced in early December, in the Managed Care sector. That deal alone accounted for 67% of the quarter’s total spending.

Long-Term Care remained the most active of all the sectors, although quarterly deal volume continued to slip. The 70 deals announced in the recent fourth quarter are 5% lower than the previous quarter (74 transactions). Among the services sectors, Hospitals, Laboratories/MRI/Dialysis, Rehabilitation and Other Services were the only sectors to equal or increase deal volume levels above the previous quarter.

The technology sectors showed some improvement versus the year-ago quarter, except for Biotechnology, which dipped 13%. Compared with the previous quarter, all showed higher deal volume, with the exception of eHealth (-29%).

“M&A in the fourth quarter of 2017 saw a new focus on consumerism in healthcare,” said Lisa E. Phillips, editor of “The CVS Health/Aetna deal is supposed to create community health hubs. We expect to see a few more atypical match-ups like that in 2018, where acquirers look for targets in a different sector.”



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