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Hospital M&A activity up 5% so far this year

Q1 2012 hospital deals totaled $129M

Topics: Mergers and Acquisitions, Health Systems, Strategy, Finance

April 27, 2012

Hospitals completed 23 mergers and acquisitions (M&A) in the first quarter of 2012, up 5% from the first quarter of 2011, according to a report from Irving Levin Associates.

Altogether, hospital deals in Q1 2012 totaled $129 million.

In a report released earlier this year, Moody's Investor Service said that continuing mergers-and-acquisitions activity presents a long-term positive for the industry and an exit strategy for bondholders. Moreover, Modern Healthcare notes that acquisitions are helping hospitals surmount operating challenges, such as decreased volumes in rural hospitals.

Overall health industry M&A activity
The report found that the overall health care industry completed 274 M&A deals in Q1 2012, up 9% from Q1 2011. The total value of the mergers and acquisitions was $28.9 billion.

Specifically, the report found that in Q1 2012:

  • Long-term care providers closed 39 deals, the same as in Q1 2011;
  • Physician groups closed 20 deals, up 11% from Q1 2011;
  • Managed care groups closed six deals, up 500% from Q1 2011; and
  • Rehabilitation organizations closed five deals, up 67% from Q1 2011 (Kutscher, Modern Healthcare, 4/26 [subscription required]; Letourneau, Healthcare Finance News, 4/26; Irving Levin Associates release, 4/25).

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