The total of 245 deals in Q2 this year was 7 percent lower than deal volume in Q2 of 2022 and 41 percent lower than Q2 of 2021. Not since the second quarter of 2020 has M&A been so restrained. The count includes deals among physician groups, health IT, post-acute care and health systems.
“Ongoing pressures could keep second-half M&A near first-half levels,” Kristin Pothier, leader of healthcare and life sciences for KPMG and principal of deal advisory, said. “Additional interest-rate hikes even amid an economic downturn, political divisions in advance of a presidential election year, and uncertainty about the valuations of potential acquisition targets may combine to postpone a rebound in deal making. But we expect at least some of those headwinds to moderate toward the end of the year, and that could begin to release long-pent-up demand.”
Although deal volume was muted, Q2 did bring at least one significant acquisition per subsector, such as CVS Health’s May closing on Oak Street Health for $10.6 billion and UnitedHealth Group’s $3.3 billion agreement to take over Amedisys in late June.
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