Stephen M. Monroe, Partner
Kathy Hammell, Editor
Phone: (800) 248-1668
Fax: (203) 846-8300
NEW CANAAN, CT. – Feb. 2, 2000 – U.S. hospital merger and acquisition activity declined in 1999, with 30 percent fewer deals made than in the previous year, according to Irving Levin Associates, a research and health care publishing firm in New Canaan.
In its sixth edition of The Hospital Acquisition Report for 1999, Levin reports that there were 111 hospital mergers and acquisitions last year, including the sale of 10 hospitals by Tenet for $520 million to Iasis Healthcare. In 1998, 144 deals were reported. In 1995, 129 deals; in 1996, 161 deals; and in 1997,197 deals.
This down slide represents the second time since 1993 that M&A activity in the hospital market dropped. “Acquisitions in 1999 continue to reflect the need to cut costs, such as consolidating accounting and computer services,” says Kathy Hammell, editor of the Report.
“1999 was also known as a year when several large profile mergers came apart, including the previously merged combination of the Stanford University Hospital and Medical Center with the University of California-San Francisco facility,” added Hammell. This deal was originally announced in 1996, consummated in 1997, and undone in 1999. The same was true for the 1997 merger of Geisinger Health System and Milton S. Hershey Medical Center in Pennsylvania which was also undone in 1999.
M&A of non-profit hospitals continued to dominate the market last year: 73 transactions were announced by nonprofit acquirers and 69 transactions were for nonprofit targets.
“We expect the volume of hospital M&A activity in 2000 to remain close to 1999 levels,” said Stephen M. Monroe, managing partner at Irving Levin Associates. “With continued scrutinizing of government reimbursements, hospitals will continue to seek merger partners and other strategic alliances.”
The Hospital Acquisition Report, Sixth Edition, contains nearly 100 pages of hard-to-find information on all publicly announced hospital mergers and acquisitions in 1999. In addition, the Report contains an analysis by both the type of acquirer, as well as the type of target. For the first time this year, the Report will include a section updating transactions from previous years.
Irving Levin Associates, Inc. is a New Canaan, Connecticut-based research and publishing firm specializing in health care investments. The firm has 50 years of experience in the health care acquisition market. The Hospital Acquisition Report, Sixth Edition, may be purchased for $395 by calling 1-800-248-1668.
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