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Healthcare M&A transactions hit record low in Q1, Kaufman Hall says

Driven by the COVID-19 pandemic, the healthcare industry continued to see fewer mergers and acquisitions in the first quarter of 2022, with only 12 transactions recorded, according to an April 7 Kaufman Hall report.

Five things to know:

1. The number of mergers and acquisitions is the lowest of any first quarter since Kaufman Hall started tracking the transactions in 2016. The first quarter of 2016 had 25 transactions; 2017 had 27; 2018 had 30; 2019 had 27; 2020 had 29; and 2021 had 13.

2. In previous years, the low number of transactions had been offset by more "mega" transactions — those that occurred when the seller had revenue greater than $1 billion — but there were no mega transactions in this quarter. In four of the transactions, the smaller party's average revenue was less than $100 million.

3. There were several transactions in which for-profit health systems were the seller, accounting for seven of the deals. Just one transaction had a for-profit buyer.

4. National health plans are continuing to move into care delivery, especially home healthcare. This includes UnitedHealth Group's Optum division, which plans to acquire home-based health operator LHC Group.

5. Kaufman Hall anticipates the transaction pace among health systems to speed up as healthcare organizations move beyond the pandemic.

 

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