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Kindred Exits Skilled Nursing Business

by | Jul 7, 2017 4:42 pm | Hospitals, Long-Term Care, Private Equity

Kindred Healthcare (NYSE: KND) has made no secret that it is getting out of the skilled nursing business. It took until June 30 for the deal announcement to come, and when it did, it was a bit of a surprise that a single buyer was taking over the entire business. Private equity firm BlueMountain Capital Management, LLC, through a joint venture it is leading called BM Eagle Holdings, agreed to acquire Kindred’s 89 skilled nursing facilities. BlueMountain, you may recall, acquired the financially failing Daughters of Charity hospital system in California in July 2015, following the collapse of Prime Healthcare Services’ $849 million bid in March 2015. A week after this deal with Kindred... Read More »
Investors Want Health Care Services with No Strings Attached

Investors Want Health Care Services with No Strings Attached

by | Jun 9, 2017 7:28 pm | Behavioral Health Care, CRO, eHealth, Home Health & Hospice, Hospitals, Laboratories, MRI & Dialysis, Long-Term Care, Managed Care, Medical Devices, Other Services, Pharmaceuticals, Physician Medical Groups, Rehabilitation

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 »

Hospital Deals Rebound in May 2017

by | May 26, 2017 5:24 pm | Hospitals, Private Equity

Hospital merger and acquisition activity was fairly quiet in the first four months of the year, totaling 24 deals that made to a definitive agreement or beyond. Then came May, with a combined total of 13 transactions announced in the first four weeks (through May 26). Deal volume in the hospital sector through May 26 now totals 37 transactions, targeting 79 hospitals with 13,854 beds. The nearly $2.3 billion combined spending includes the $1.4 billion just announced by Medical Properties Trust (NYSE: MPW), which acquired the real estate assets of 10 acute care hospitals and one behavioral health facility (approximately 2,400 beds) belonging to IASIS Healthcare, a TPG portfolio company.... Read More »

Financial Buyers Announce 59 Deals in Q1:17

by | May 17, 2017 1:46 pm | Behavioral Health Care, eHealth, Home Health & Hospice, Hospitals, Private Equity

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 »
Investors Want Health Care Services with No Strings Attached

May Day! Hospital Mega-Mergers Ahead

by | May 10, 2017 6:53 pm | Hospitals

Hospital merger and acquisition activity took a breather in the first quarter of this year. The 19 deals announced then represented a 17% decrease compared with the 23 deals announced in the fourth quarter of 2016, and a 30% decrease year over year. Readers who saw headlines in April regarding a rush of hospital mergers in the first quarter, according to data published by Kaufman Hall, should know our differing results are due to methodology. We do not report hospital mergers or acquisitions when the announcement involves signing a letter of intent, when many deals fall apart soon after. Our data derives from the more solid step in the process, when both entities have reached a definitive... Read More »

Health Care Deals Slide in April 2017

by | May 3, 2017 8:26 pm | Behavioral Health Care, Biotechnology, eHealth, Home Health & Hospice, Hospitals, Laboratories, MRI & Dialysis, Long-Term Care, Managed Care, Medical Devices, Other Services, Pharmaceuticals, Physician Medical Groups, Rehabilitation

April usually doesn’t feel like February, at least, weather-wise. As far as healthcare mergers and acquisitions go, however, deal volume in April 2017 (103 deals) feels a lot like February’s deal volume (102). The chart below shows the clear winners and losers in April 2017. Deal volume was down 29% compared with the previous month (March, 145 deals), and slid 12% compared with the year before (April 2016, 141 deals). Healthcare services deal volume accounted for just 50% of April’s preliminary total. The services sectors typically account for higher percentages than the technology sectors (although that trend is reversed when it comes to dollar volume). The services side... Read More »