The number and dollar value of healthcare sector mergers and acquisitions grew considerably in 2014, according to a report from Irving Levin Associates.
The volume of transactions increased by 18 percent, from 637 transactions in 2013 to 752 transactions in 2014. The dollar value of the mergers and acquisitions also grew substantially, from $52.7 billion in 2013 to $62 billion in 2014.
The merger and acquisition totals posted in 2014 were "record-breaking," according to Lisa E. Phillips, editor of the 2015 report.
Highlighted below are additional findings from the report:
- The healthcare services sector contributed 58 percent of the year's combined 1,307 deals, but only 16 percent of 2014's $387 billion in spending.
- M&A activity in behavioral healthcare, home health and hospice, hospitals, managed care, physician medical groups, rehabilitation and other services all posted gains over their 2013 totals.
- The behavioral healthcare sector saw more transactions in 2014 than in the previous four years.
- The physician medical group sector saw significant interest from outside companies, with nearly $3.2 billion being spent on physician groups in 2014.
- The laboratories and MRI and dialysis sector experienced a slight 8 percent decline in deal volume between 2013 and 2014.
- The hospital sector experienced a deal volume increase of 14 percent in 2014, to 100 transactions; however, the number of hospitals involved in transactions decreased by 40 percent, to 178 in 2014.
"The year started off with some uncertainty, as the impact of the state and federal healthcare exchanges still wasn't clear," said Ms. Phillips. "By the second quarter, deal making picked up as more and more investors entered the healthcare market and raised valuations beyond what traditional investors were comfortable with, in some cases. By the fourth quarter, the market was settling down, however."
For more information on the full 2015 Health Care Services Acquisition Report, click here.
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