Hospital M&A Activity Slowed in Q4:2023, According to Acquisition Data from LevinPro HC

NEW CANAAN, Conn., Jan. 19, 2024 – Headwinds and market challenges took a toll on Hospital M&A activity in the fourth quarter of 2023. According to new acquisition data captured in the LevinPro HC platform, there were 18 transactions announced in the Hospital sector in Q4:23, an 18% decline from activity in Q3:23 when 21 deals were announced. Fourth quarter activity was also slower than Q4:22 transaction volume when 20 deals were announced.

Disclosed spending reached $2.84 billion in Q4:23, a surge of 63% compared with spending in the third quarter of 2023. The largest deal of the quarter by price was Novant Health System’s acquisition of three hospitals in South Carolina from Tenet Healthcare Corporation for $2.4 billion. Combined, the three hospitals generated $466.6 million in revenue in 2022 and have a total of 264 beds. The deal is expected to close in 2024.

Although deal volume was slow, there were still several notable deal announcements, especially from large health systems. In the fourth quarter, Tampa General Hospital and Bravera Health in Florida closed negotiations, forming a health system with six hospitals, more than 150 care locations and nearly 14,000 team members and providers. And after signing a letter of intent in May 2023, BJC Health System and Saint Luke’s Health System of Kansas City closed their merger in November. The combined system will have approximately $10 billion in revenue with 28 hospitals and hundreds of clinics and service centers.

Most fourth-quarter transactions targeted systems and organizations with more than 100 beds and several facilities. Very few deals focused on critical access hospitals or community hospitals. In the 18 deals announced in Q4:23, more than 3,400 beds and 43 hospitals were acquired or involved in a merger.

Health systems and hospitals also pushed further into the outpatient care market, purchasing everything from urgent care centers, home health agencies, to physician groups. Yale New Haven Health System in Connecticut purchased PhysicianOne Urgent Care, and HCA Houston Healthcare, a division of HCA Healthcare, acquired 11 SignatureCare Emergency Centers in Houston, Texas for an undisclosed amount.

“Transaction volume may have slowed, but mergers between large health systems and continued activity in the outpatient care market shows the industry is pushing against headwinds,” said Dylan Sammut, Editor of Health Care at Irving Levin Associates, which publishes the data on its LevinPro HC platform. “Full-year activity did increase in 2023 compared with 2022, and analysts we’ve spoken with are optimistic about the future despite the challenges ahead.”

All quarterly results are published in The Health Care M&A Report, which is part of the Irving Levin Associates and LevinPro investment research source. For information, or to order the reports, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains healthcare and senior housing M&A markets databases.