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

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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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