Behavioral Health Care M&A Activity Jumps in Q4:2015
|FOR IMMEDIATE RELEASE||
Norwalk, CT - January 26, 2016 - The behavioral health care acquisition market was relatively active in the fourth quarter of 2015. A total of 12 transactions were announced in last year’s fourth quarter, or 71% more than the fourth quarter in 2014. Compared to the third quarter of 2015, however, the activity remained flat as both quarters produced 12 announced acquisitions. Most of the transactions in the fourth quarter of 2015 were small, and just three had disclosed prices for a total of $35.05 million. In the year-ago quarter the total amount spent was $1.19 billion, which was dominated by one billion-dollar deal. One of the notable acquisitions in 2015’s fourth quarter was AAC Holdings, Inc.’s purchase of Las Vegas, Nevada-based Solutions Recovery, Inc. for $13.0 million. Solutions Recovery has annual revenues of about $6.0 million and provides detoxification, residential and intensive outpatient treatment services in the greater Las Vegas market. Another transaction was the purchase of Harmon Hospital, also in Las Vegas, by LTC Properties, Inc. for $9.3 million, or $78,800 per bed. Annual revenues were expected to be over $26 million.
Behavioral health care has been growing in importance in the entire health care policy discussion, especially during this presidential election cycle. As coverage for a variety of behavioral health problems increases, investment dollars will be more attracted to the sector. We have already seen this beginning in 2015. “Having back-to-back quarters with 12 transactions in this sector is unprecedented and a sign that investment interest has certainly increased,” commented Lisa Phillips, Editor of The Health Care M&A Report, which publishes the data. “There continues to be increased interest in this once sleepy market, not only because of the underserved need for behavioral health care, but because insurance coverage and reimbursement policies may be easing for various types of behavioral health care,” stated Phillips. This market is expected to see an uptick in new development of inpatient care facilities, and that real estate component may drive investor interest as well.
All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the Health Care M&A Information Source. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the health care and senior housing M&A markets.
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