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Decade in Review: Hospital M&A Deal Volume Increases

 

FOR IMMEDIATE RELEASE Sanford B. Steever, Editor
Steve Monroe, Editor
800-248-1668
203-846-6800
Fax: 203-846-8300
pressreleases@levinassociates.com

NORWALK, CT – February 28, 2012 – Over $86.3 billion was committed to fund the 590 hospital takeovers that were announced during the 10-year period ended December 31, 2011, according to Deal Search Online.  Earlier in the decade activity was sluggish due to a recession but the market rebounded and grew to the level of $35.5 billion in 2006. A similar response is occurring now as the M&A market continues to recover from the wake of damage left by the Great Recession, but general uncertainty is playing a role as well. In addition, larger hospitals and systems have been acquiring smaller ones in an attempt to gain pricing power and to prepare for the full implementation of health care reform.
 

Hospital Mergers and Acquisitions, 2002 to 2011

Year

Number of Deals

Dollars Committed

2002

56

$3,403,681,000

2003

37

$2,341,550,000

2004

59

$9,706,390,000

2005

50

$2,905,729,000

2006

55

$35,533,500,000

2007

61

$9,257,130,000

2008

60

$2,580,600,000

2009

51

$1,813,600,000

2010

75

$10,792,632,000

2011

86

$7,938,260,000

Total

590

$86,273,072,000


In 2011, the hospital sector posted a 10-year high in deal volume with 86 M&A transactions. The total dollars committed was $7,938,260,000, nowhere near the mammoth number that 2006 posted for the 10-year high, however. Large deals in the second quarter of 2011 were significant contributions to the annual total.

The five largest hospital transactions reported in 2011, according to Deal Search Online, are listed in the table below.

Five Largest Hospital Deals Of The Past 12 Months

Value

Quarter

1.    Highmark acquired West Penn Allegheny

$1.475 billion

Q2:11

2.    HCA acquired the remaining interest in HealthONE

$1.45 billion

Q2:11

3.    Ascension Health acquired Alexian Brothers

$645.0 million

Q2:11

4.    Health Management Associates acquired Mercy Health Partners

$525.0 million

Q3:11

5.    Trinity Health acquired Loyola University Health System

$475.0 million

Q1:11

 


 For more information on DealSearchOnline.com or for a subscription to any Irving Levin publication, call 800-248-1668 or go to www.levinassociates.com.  Irving Levin Associates, Inc. was established in 1948 and is based in Norwalk, CT.  This privately held corporation publishes research reports and newsletters, and maintains health care and seniors housing M&A databases.   
 

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