Health Care Deal Volume Slows in Q2:2017, As Dollar Volume Rises
Health care merger and acquisition activity slowed in the second quarter of 2017. Compared with the first quarter of 2017, deal volume decreased 15%, to 366 transactions. Deal volume was also lower compared with the same quarter the year before, down 14%. Combined spending in the second quarter reached $95.8 billion, an increase of 62% compared with the $59.1 billion spent in the previous quarter, according to HealthCareMandA.com. Second quarter deal value was up 8% compared with the $88.7 billion spent in Q2:16. Health care services transactions accounted for 52% of the second quarter’s dollar volume, much higher than the 14% share reported in the first quarter, and the 19% share recorded... Read More »
June 2017 Deal Volume Shows Continued Strength
Preliminary data for the month of June shows that investors are still bullish—or at least comfortable—betting on health care. Some 123 transactions were announced last month, an 11% decrease compared with May’s 138 transactions. Year over year, however, this early data is just 5% below the 130 deals announced in June 2016. For a little perspective, April 2017’s deal volume was just 104 transactions, which made the May numbers look very strong by comparison. June’s deal volume looks reassuringly healthy, as it is close to the year-ago total, and could be adjusted upward in the future as more deals come to light. The same trends we’ve noted in previous months are still playing out, too. Deal... Read More »
Investors Want Health Care Services with No Strings Attached
Preliminary data for the month of May shows an encouraging uptick in deal volume, with the services sectors making up 66% of the total. Some 134 transactions were announced last month, a 30% increase over April’s anemic 103 deal volume total. But monthly transaction totals in 2017 are not keeping pace with those in 2016. A year ago, 151 transactions were announced, 11% higher than in May 2017. There’s no question that the ongoing uncertainty surrounding the American Health Care Act hangs heavily on healthcare investors. The Senate Republicans have been at work behind closed doors to craft a different deal than the one sent to them by the House Republicans in mid-May. From the handful of... Read More »Behavioral Health Care Market Is Healthy, Not Frothy
The Behavioral Health Care M&A market has enjoyed six years of strong growth, following passage of the Affordable Care Act in 2010. The market peaked at 41 deals announced in 2016, with $3.4 billion in combined spending. Despite the uncertainty surrounding the ACA’s replacement, merger and acquisition activity is still strong in the early months of 2017. Tailwinds are stronger than headwinds. Destigmatization of addictions, mental health issues and other disorders has brought attention to the care needed by millions. There is still significant, unmet need in many sub-sectors, such as acute care psychiatric beds. De novo building is easing some of that need, and could lead to more... Read More »Financial Buyers Announce 59 Deals in Q1:17
Financial buyers, which include real estate investment trusts and private equity firms, are not the dominant players in the health care M&A market. Their participation depends on many factors, with valuations being an important determinant, (see chart below). Middle-market private equity firms, in particular, have had a hard time getting into and then winning auctions for health care entities in the past few years, as strategic buyers have outspent or even pre-empted auctions. In the first quarter, financial buyers accounted for 15% of the deal volume, with 59 deals, which is slightly lower than the previous four quarters. The first quarter featured eight deals that topped the $1.0... Read More »Schedule a demo
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