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Hospital M&A activity shifts to regional partnerships: Kaufman Hall

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Merger and acquisition revenue remains high as hospitals and health systems shift  their focus to acquisitions of small, independent hospitals and regional partnerships, according to an analysis published July 8 from healthcare consulting firm Kaufman Hall. 

Total M&A revenue in the first and second quarter totaled $17.2 billion on 27 transactions. This is the second highest in recent years, according to the report. In 2020, revenue for the same period was $17 billion with 43 transactions. 

In the second quarter, M&A volume was below historic volume with 14 transactions. However the quarter saw a high number of transactions with revenues above $500 million. 

Some of the most significant transactions in the second quarter include: Grand Rapids, Mich.-based Spectrum Health and Southfield, Mich.-based Beaumont Health's plan to form a combined system in Michigan with $13 billion in annual operating revenue; Atlanta-based Piedmont Healthcare's plan to acquire four Georgia hospitals from Nashville, Tenn.-based HCA Healthcare and Charleston-based Medical University of South Carolina's plan to buy three South Carolina hospitals from Brentwood, Tenn.-based LifePoint Health.

"Many of this quarter's most significant transactions reflect the trend toward regionalization, with an emphasis on building depth within local markets and breadth through expansion to neighboring geographies," Kaufman Hall said. 

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