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August 2004 issue
After Slow Start, Senior Care M&A
Activity is Picking Up
While we may never again see the volume
of the mid-1990s, M&A activity in the senior care market is finally
beginning to pick up some steam this year, with a large jump in activity
from the first quarter and a fast start to the third quarter.
...
Assisted Living Market
Still the most active segment,
assisted living facilities for sale continue to be more on the distressed
side. See page 1
...
Independent Living Market
Capital Senior Living announces large
management company deal, increasing by 25% the number of units under
management. See page 3
...
Skilled Nursing Market
Struggling nursing facilities
continue to get sold, and financed. See page 4
...
Other News
Updates - 5
Financing News - 6
Second Quarter Earnings - 7
REITs - 8
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After Slow Start, Senior Care M&A
Activity is Picking Up After the first quarter
senior care merger and acquisition results were in, we wondered out loud,
“Where’s the beef?” In the full year 2003, the deal volume outpaced 2002’s
lackluster year by almost 50%, and we were hoping that this renewed
investor interest would carry into 2004 with a flurry of transactions.
That was not to be, at least in the first quarter, but as can be seen
below, the volume of publicly announced deals in the senior care segment
jumped in the second quarter, and the third quarter is off to a rapid
start.
We are still lagging behind last year’s activity, but the entire health
care services sector saw a lot more mergers and acquisitions in the past
quarter, when compared with both the previous quarter and the year-ago
quarter. This may bode well for the senior care market during the
remaining five months of the year.
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The Health Care M&A Market
|
| Sector |
Q2:04
Deals* |
Q1:04
Deals |
%Change |
Q2:03
Deals |
%Change |
| Services:
|
|
|
|
|
|
| Long-Term Care |
18 |
12 |
+50% |
26 |
-31% |
| Hospitals |
17 |
7 |
+143% |
4 |
+325% |
| Physician Medical Groups |
12 |
10 |
+20% |
7 |
+71% |
| Laboratories, MRI, Dialysis |
11 |
6 |
+83% |
7 |
+57% |
| Managed Care |
9 |
8 |
+13% |
6 |
+50% |
| Behavioral Health |
8 |
4 |
+100% |
4 |
+100% |
| Home Health |
8 |
6 |
+33% |
4 |
+100% |
| Rehabilitation |
0 |
6 |
NM |
6 |
NM |
| Other |
28 |
28 |
0% |
27 |
-4% |
| Services Subtotal |
111 |
87 |
+28% |
91 |
+22% |
| |
| Technology:
|
|
|
|
|
|
| Pharmaceuticals |
45 |
39 |
+15% |
41 |
+10% |
| Medical Devices |
36 |
37 |
-3% |
45 |
-20% |
| Biotechnology |
30 |
29 |
+3% |
37 |
-19% |
| e-Health |
8 |
15 |
-47% |
16 |
-50% |
| Technology Subtotal |
119 |
120 |
-1% |
139 |
-14% |
| |
|
|
|
|
|
| Grand
Total |
230 |
207 |
+11% |
230 |
0% |
| * Preliminary figures,
NM not meaningful |
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