Stephen M. Monroe, Partner
Phone: (800) 248-1668
Fax: (203) 846-8300
Record Year in Hospital Acquisition market as nonprofits wake up According to Irving Levin Associates, Inc.
(March 13, 1997 – New Canaan, Connecticut) The results of a comprehensive research report on 169 mergers and acquisitions in the U.S. hospital sector has just been released by Irving Levin Associates, the publisher of the report entitled The Hospital Acquisition Report, Third Edition.
In 1996, the total market value of hospital mergers and acquisitions was a record $18 billion. Nonprofit activity dominated the transaction market in 1996. Over 80% of all acquirers and targets were nonprofit hospitals.
“The sleeping giant – the nonprofit hospital sector – clearly woke up this year. Over the past 18 months, there has been a dramatic increase in nonprofits selling to other nonprofits – rather than the investor owned segment. Many call this the ‘ABC’ backlash – Anyone But Columbia” according to Stephen M. Monroe, a partner at Irving Levin Associates, Inc.
The average price paid to acquire a hospital bed was just over $230,000, a 17% decline from 1995. “The decline in prices does not imply a downturn in the market for hospitals. In 1995, there were several high-priced transactions that pushed the averages up. The hospital acquisition market is as vibrant as ever.” according to Mr. Monroe.
The number of hospital transactions reached a new record, increasing 27% from the prior year. There were a record 169 transactions in 1996 compared to 133 in 1995. Volume jumped significantly in the third quarter with 59 transactions – most likely stimulated by the rush to avoid uncertainty surrounding a potential change in regulations due to the election. A total of 325 hospitals changed hands in 1996, also a record.

Two transactions exceeded the billion dollar mark – Tenet’s $3.1 billion acquisition of OrNda Health and Forstmann Little’s $1.37 billion acquisition of Community Health Systems.
The Hospital Acquisition Report has approximately 125 pages of hard-to-find information on all of the transactions that occurred in 1996. In addition, the report contains per bed prices, revenue multipliers and an overview of the market in 1996. Verified fact sheets include prices, terms, acquirer and target statistics, and key contacts.
The Hospital Acquisition Report, Third Edition may be purchased by calling (800) 248-1668.
Irving Levin Associates, Inc. is a Connecticut-based consulting firm specializing in health care and senior housing investments. The company has nearly 50 years of experience in the health care and senior housing markets.
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