NEW CANAAN, CT – JANUARY 14, 2021 – After almost a year of dealing with the coronavirus pandemic, hospital merger and acquisition activity returned to normal levels in the fourth quarter of 2020. Twenty-six deals were announced, which is 4% higher than the same quarter in 2019, according to new acquisition data from HealthCareMandA.com. Deal volume was 136% higher than the previous quarter in 2020, when just 11 deals were announced.
Year over year, transactions in the sector were down 21%, to 78 deals, compared with 2019, when 99 deals were announced.
“Hospital merger and acquisition activity was fairly strong in Q4, and some sizable systems found new partners,” said Lisa E. Phillips, editor of the Health Care M&A Report, which publishes the data. “The Covid-19 crisis definitely played a role in some way, this year. Eight deals were the result of bankruptcy proceedings, and three of those sales were finalized in the fourth quarter.”
The largest U.S. system to change hands was Wake Forest Baptist Health, a five-hospital not-for-profit system with 1,535 beds based in Winston-Salem, North Carolina. It merged into Atrium Health, formerly known as Carolinas HealthCare System, which already had 40 hospitals across North and South Carolina and Georgia. Two other North Carolina systems found merger partners. New Hanover Regional Medical Center, a 677-bed hospital in Wilmington, agreed to merge with Novant Health in a transaction valued at $1.5 billion. On the other end of the financial spectrum, Asheboro-based Randolph Health emerged from Chapter 11 bankruptcy proceedings with privately held American Healthcare Systems as its new owner with an $18 million bid.
The fourth-quarter momentum spilled over into the first week of January, with four more transactions announced, all among not-for-profit organizations. “Even though the divestitures from publicly traded hospital companies have dried up, deal volume in 2021 may look more like 2019 than 2020,” Phillips said. “But with Covid-19 cases reaching new levels every week, we’re not making any predictions.”
All quarterly results are published in The Health Care M&A Report, which is part of the HealthCareMandA.com 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 New Canaan, Connecticut. The company publishes research reports and newsletters and maintains databases on the health care and senior housing M&A markets.