Hospital M&A Activity Increased in Q2:20, According to Acquisition Data from

NEW CANAAN, CT – JULY 21, 2020 – Hospital merger and acquisition activity increased in the second quarter of 2020, according to new acquisition data from Twenty-two transactions were reported, an increase of 15% compared with the first quarter of 2020. Deal volume increased slightly in Q2:20 compared with Q2:19, when 21 transactions were announced. Dollar volume increased as well, totaling approximately $442 million, based on disclosed prices. That represents an 10% rise from $397 million spent on hospital deals in Q1:20. However, year over year, Q2:20 spending was down 32% versus the $661 million reported in the same quarter in 2019.  

“Acquisition activity picked up in the second quarter largely due to bankruptcy sales that were already in progress,” said Lisa E. Phillips, editor of the Health Care M&A Report, which publishes the data. “Community Health Systems continued its divestiture program, selling five more hospitals in four separate deals.” 

Most transactions were for small, regional hospitals with only one facility. The largest deal based on hospital count was the acquisition of Steward Health Care System (35 hospitals, 4,176 beds) by a group of Steward Health Care physicians led by long-time Steward Health Care CEO Ralph de la Torre, MD. One regional hospital deal was announced. Michigan-based Beaumont Health and the Illinois-Wisconsin system, Advocate Aurora, agreed to merge after Beaumont broke off its previously announced agreement to merge with Ohio’s Summa Health. 

“Hospitals lost more than $200 billion between March and June due to COVID-19, according to the American Hospital Association,” Phillips added. “The AHA predicts they will lose another $120 billion through the end of 2020. If that prediction comes true, we’ll see a rise in M&A activity in this sector.” 

All quarterly results are published in The Health Care M&A Report, which is part of the investment research source. For sector-specific research and analysis, please see The 2020 Health Care Services Acquisition Report. For more information, or to order the reports, 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.