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16% of healthcare transactions were megamergers in 2021, Kaufman Hall report finds

Although 2021 saw fewer healthcare transactions than in 2020, the sizes of the transactions were larger, with 16.3 percent being megamergers, according to a recent Kaufman Hall report.

This year saw the largest percentage of megamergers than in the last six years. In 2020, 8.9 percent of transactions were megamergers.

A megamerger is a transaction where the seller or smaller partner had more than $1 billion in annual revenue, according to the report.

Additional findings:

1. The smaller partners had high credit quality in many of the 2021 transactions, earning an A- or higher for more than one in every 10 transactions.

2. The average size of smaller partner by annual revenue rose to $619 million. In 2020, it was $388 million.

3. Transactions with nonprofits accounted for 87 percent of transactions, up from 81 percent in 2020.

4. Transactions with rural or urban/rural sellers reached 31 percent in 2021, compared to 24 percent in 2020. The portion of financially distressed sellers was 16 percent in both 2020 and 2021.

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