Bankrupt Hospital M&A Up in Non-Expansion States
Has the decision to expand or not to expand Medicaid impacted merger and acquisition activity among hospitals and health systems? With only two years’ worth of data (2014 and 2015), it’s still early to draw definitive conclusions. So consider the following data as anecdotal evidence of the economic impact the various state governments have brought to bear on healthcare providers in their states. Mergers and acquisitions among all types of hospitals—acute care, long-term care, critical access, etc.—in the Medicaid expansion states increased from 49 deals in 2014 to 56 deals in 2015. Hospitals and health systems based in non-expansion states saw M&A activity decrease in the same time... Read More »Two For-Profit Hospital Systems Merge
Two hospital chains that changed hands only last year announced their merger on March 22. RegionalCare Health Partners Inc., based in Brentwood, Tennessee, and Capella Healthcare, Inc., located in nearby Franklin, will form RCCH Health Partners when the deal closes in the second quarter. The combined system will have 18 hospital campuses in 12 states with more than 13,000 employees, 2,000 affiliated physicians and $1.7 billion in revenue. Only last July, Capella Healthcare was sold by GTCR to Medical Properties Trust, Inc. (MPT) and Capella management for approximately $900 million. In November, Apollo Global Management (NYSE: APO) paid an undisclosed price for RegionalCare, which was then... Read More »Allegiance Health Joins Henry Ford Health System
Even large hospitals are looking to scale up these days. That’s what drove Allegiance Health, a 480-bed community hospital in Jackson, Michigan, to sign on with Detroit-based Henry Ford Health System. Henry Ford is a five-hospital system that provides both health insurance and health care delivery, including acute, specialty, primary and preventive care services. Allegiance Health wasn’t financially troubled, having reported nearly $480 million in operating income through June 30, 2015, and about $32 million in EBITDA. This deal between the two not-for-profit systems will enable Allegiance to expand its services and build clinical capacity. The process isn’t expected to... Read More »Hospital Bankruptcies Contributing to M&A Volume
The hospital sector staged a strong showing in February, with 11 transactions recorded thus far. The month’s total beat January’s four deals, and was even higher than December 2015’s nine transactions. Unfortunately, bankruptcy proceedings provided the catalyst for four of February’s hospital deals, and we’re sure to see more in the year ahead. Last year, at least 11 hospital deals involved a bankrupt facility, so four already on the books in 2016 doesn’t seem to bode well. Prices for the hospitals reached $96.2 million, which was what HCA North Texas (NYSE: HCA) paid for Forest Park Medical Center at Frisco, a 54-bed hospital that is part of the failing, physician-owned chain in Texas.... Read More »Leap Day Boosts February Deal Volume
It’s Leap Year, which means February was a day longer in 2016. This year, that extra day marked the announcement of seven healthcare transactions, which raised the month’s total to a healthy 113 deals. The services sectors were more active than usual, and accounted for 65% of the total. Usually, the services side makes up about 55% to 60%. Dollar volume was healthy, too, at $27.7 billion. But given the records set in 2015, February’s dollar total ended up 35% below the same month a year ago. The deals may be getting smaller, but they’re still being made. Read More »Schedule a demo
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