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Kaufman Hall: Hospital M&A up 11%+ from Q1 2017

Thirty hospital and health system mergers and acquisitions transactions were announced during the first quarter of 2018, up 11-plus percent from one year prior, according to an analysis by Kaufman Hall, & Associates released April 26.

Kaufman analysts speculate M&A activity in the hospital space will continue with its brisk pace in 2018.

"Sizable organizations are continuing to pursue even larger partners in 2018, as providers look to establish a broader base of services and operations, in part to compete against nontraditional market entrants that are bringing consumer focus and lower costs to the industry," said Anu Singh, managing director at Kaufman Hall.

Here are five takeaways from the Kaufman Hall report.

1. Three deals during the first quarter of 2018 involved systems with more than $1 billion in revenue, while four deals included systems with revenue bases of $500 million to $1 billion. The transactions indicate the "megadeal" trend from last year will continue into 2018.

2. The largest deal announced during the first quarter of 2018 was the proposed merger between Marriottsville, Md.-based Bon Secours Health System and Cincinnati-based Mercy Health announced in February. The proposed deal would create an $8 billion, 43-hospital system.

3. During the first quarter of 2018, slightly over one-third of announced transactions included for-profit targets, compared to 32 percent of transactions in 2017.

4. Eleven deals during the first quarter involved for-profit acquirers, while 19 transactions involved nonprofit acquirers.

5. Texas represented the most active state for hospital M&A in 2018 thus far, with three announced transactions.

To access the full report, click here.

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