Health Care Deal Volume Continues to Slow in Q3:2017, According to

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NORWALK, CT – October 27, 2017 –Health care merger and acquisition activity slowed again in the third quarter of 2017. Compared with the second quarter, deal volume decreased 10%, to 334 transactions. Deal volume was also lower than the same quarter in 2016, down 14%. Combined spending reached $42.7 billion, a decline of 57% compared with the $98.3 billion spent in the previous quarter, according to Third quarter deal value was 13% lower compared with the $48.9 billion spent in Q3:16.

Health Care M&A Market – Deal Volume by Sector




Sector Deals Deals Change Deals Change
Behavioral Health Care 13 9 44% 9 44%
Home Health & Hospice 10 10 0% 12 -17%
Hospitals 15 22 -32% 19 -21%
Laboratories, MRI & Dialysis 14 13 8% 16 -13%
Long-Term Care 71 76 -7% 71 0%
Managed Care 8 4 100% 3 167%
Physician Medical Groups 28 31 -10% 33 -15%
Rehabilitation 10 7 43% 11 -9%
Other 42 52 -19% 62 -32%
   Services subtotal 211 224 -6% 236 -11%
Biotechnology 42 54 -22% 52 -19%
eHealth 42 44 -5% 29 45%
Medical Devices 23 34 -32% 32 -28%
Pharmaceuticals 16 16 0% 39 -59%
   Technology subtotal 123 148 -17% 152 -19%
Grand Total 334 372 -10% 388 -14%

Source:, October 2017

Healthcare services transactions made up 63% of the deal volume, but only 41% of the dollar value in the third quarter. The services side has seen more, but smaller transactions announced in this recent quarter. Long-Term Care remained the most active of all the sectors, and managed to equal the number of deals announced in the same quarter in 2016. However, the 71 deals announced in the recent third quarter are 7% lower than the previous quarter. Among the services sectors, Hospitals, Physician Medical Groups and Other Services all showed softer deal volume compared with the second quarter, and compared with Q3:16.

The technology sectors all trended downward versus the second quarter, except for Pharmaceuticals, which remained even with Q2:17. Only the eHealth sector posted a gain against the year-ago quarter, an indication that this sector is doing even better in 2017. That sector benefitted from the unrelenting need for healthcare providers and payers to install or upgrade systems such as revenue cycle management, data analysis and electronic medical records.

“The on-again, off-again process in the Senate to repeal the Affordable Care Act definitely had an effect on healthcare transactions by the third quarter,” said Lisa E. Phillips, editor of “We’re not seeing more mega-deals until the Trump administration gets its promised tax reform legislation through Congress.”

The fate of the ACA is still uncertain, as the President has sent mixed signals about the bipartisan legislation currently being worked on by the Senate Health, Education, Labor and Pensions (HELP) committee. “Now that there’s some bipartisan cooperation regarding healthcare legislation, we may see more investors return to the market,” Ms. Phillips said.

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