LARGEST HOSPITAL MERGERS AND ACQUISITIONS FOR THE 10-YEAR PERIOD ENDED DECEMBER 31, 2009 REVEALED BY DEALSEARCHONLINE.COM

 

FOR IMMEDIATE RELEASE Sanford B. Steever, Editor
Gretchen S. Swanson, Analyst
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com
NORWALK, CT – March 31, 2010 – Nearly $74.3 billion was committed to fund the 597 hospital mergers and acquisitions that were announced during the 10-year period ended December 31, 2009, according to DealSearchOnline.com.  The hospitals and hospital companies targeted in those mergers and acquisitions were producing annual revenues ranging from $1.5 million to $25 billion.  Among the same hospital deals, the number of beds involved ranged from single facilities with as few as 9 beds, to the largest deal, which targeted a chain comprised of 176 hospitals, 92 outpatient surgery centers and affiliated services, with a total of 41,850 beds.  In each of the top 25 largest (by price) hospital mergers and acquisitions announced during the decade 2000 to 2009, the target was a company producing annual revenues in excess of $215 million at the time of acquisition. 
 
HCA, Inc. posted the greatest annual revenue, by far, of any hospitals or hospital companies targeted in mergers and acquisitions announced during the 10-year period ended December 31, 2009.  HCA posted annual revenue of $25 billion on a trailing 12-month basis at the time its acquisition by a private equity consortium was announced in 2006.  With the next-greatest annual revenue among targets in hospital acquisitions during the same 10 years, Triad Hospitals posted annual revenue of $5.4 billion on a trailing 12-month basis at the time its acquisition by Community Health Systems was announced in 2007.  Triad Hospitals is trailed by Health Midwest, which posted annual revenue of $2.4 billion on a trailing 12-month basis at the time its acquisition by HCA, Inc. was announced in 2002.

Among the top 25 hospital acquisitions, based on price, announced during the 10-year period ended December 31, 2009, three companies announced two hospital acquisitions apiece. Health Management Associates acquired five Tenet hospitals in 2003 at a total price of $515 million and Health Management Associates acquired three Bon Secours hospitals in 2004 for a total of $279.1 million. Ascension Health acquired Baptist Hospital in 2001 for $341 million and Ascension Health acquired Carondelet Health System in 2002 for $260 million. Capella Healthcare acquired a group of nine hospitals in 2007 for a total of $315 million and Capella Healthcare acquired a group of five hospitals in 2005 for a total of $260 million.
 
The largest hospital acquisition of the 10-year period ended December 31, 2009, according to DealSearchOnline.com, was the acquisition of HCA, Inc. by a private equity consortium in a mega-deal valued at $33 billion, announced in 2006.  In the next-largest deal Triad Hospitals was acquired by Community Health Systems for $6.8 billion in 2007, followed in size by Triad Hospitals' acquisition of Quorum Health Group for $2.4 billion, which occurred in 2000, and Welsh Carson Anderson Stowe's 2004 acquisition of Select Medical Corp. for $2.3 billion. 

 

Hospital Mergers and Acquisitions, 2000 to 2009

Year

Number of Deals

Dollars Committed

2000

85

$3,773,440,000

2001

82

$3,108,119,143

2002

56

$3,403,681,000

2003

37

$2,341,550,000

2004

59

$9,706,390,279

2005

50

$2,905,728,676

2006

55

$35,533,500,001

2007

61

$9,257,130,001

2008

60

$2,580,600,000

2009

52

$1,678,800,000

Total

597

$74,288,939,100

 

Four other deals announced during the 10 years ended December 31, 2009 were also valued in excess of $1 billion, including three announced in 2004: Lifepoint Hospitals acquired Province Healthcare Company for $1.8 billion, The Blackstone Group acquired Vanguard Health Systems for $1.75 billion and Texas Pacific Group acquired Iasis Healthcare for $1.4 billion. The target in the largest deal of the decade, HCA Inc., was on the buy side in 2002 when it acquired Health Midwest for $1.04 billion.

Among the 25 largest hospital mergers and acquisitions announced in the 10-year period ended December 31, 2009, approximately 44% of the acquirers were privately held companies.  For the same 10-year period, the remaining percentage of deals is evenly split between nonprofit acquirers (28%) and publicly traded companies (28%).
 
In almost 48% of all the hospital mergers and acquisitions announced in the 10-year period ended December 31, 2009, the buyer was a nonprofit entity (286), while in more than 27% of hospital mergers and acquisitions announced during the same period the buyer was a publicly traded company (162) and in the remaining 25% the buyer was a privately held company (149). In approximately 60% of the hospital mergers and acquisitions announced in the 10 years ended December 31, 2009, the seller is represented by a nonprofit entity (359), while in 24% of the deals the target is a publicly traded company (143) and in the remaining 16% of the deals the target is a privately held entity (95).
 
The data from DealSearchOnline.com revealed that geographically, a heavy concentration of the targets in hospital mergers and acquisitions announced during the 10-year period ended December 31, 2009 were located in the states of California, Florida, Pennsylvania, Illinois, Tennessee, Alabama, Texas, Georgia and Louisiana.  During the same 10-year period, a heavy concentration of the acquirers in hospital mergers and acquisitions were based in the states of Tennessee, Texas, California, New York, Pennsylvania, Illinois, North Carolina, Indiana, Florida, Georgia, Michigan and Ohio.

Information in this press release is based on data drawn from DealSearchOnline.com, an online publication of Irving Levin Associates, Inc. Online and available 24/7 at www.dealsearchonline.com, DealSearchOnline.com is a database of current and historic health care mergers and acquisitions, with deal summaries on more than 15,000 mergers and acquisitions since 1993 in the following sectors: Behavioral Health Care; Biotechnology; e-Health; Home Health Care; Hospitals; Laboratories, MRI and Dialysis; Long Term Care; Managed Care; Medical Devices; Pharmaceuticals; Physician Medical Groups; Rehabilitation; and Other Health Care Services. Deal summaries include details such as deal terms, target and acquirer contact information (including e-mail addresses), and price to revenue multiples. Searching is free. Visit www.dealsearchonline.com for a login. Data is immediately available for download or to print, with a credit card or the purchase of a subscription. Certain Irving Levin Associates, Inc. print publications include special online access to the database for subscribers. Call 1-800-248-1668 for details on subscription options, or email customerservice@levinassociates.com.

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