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Q1 healthcare M&A volume up 25%

The health services sector is seeing increased merger and acquisition activity at the start of 2015. Overall healthcare deal volume grew 25 percent in the first quarter of 2015, compared to Q1 2014 deal volume, according to a PwC report. Disclosed transactions are up 19 percent in Q1 this year, with value up 92 percent, compared to Q1 2014.

The managed care sector saw the biggest growth, with double the deal volume compared to Q1 2014. So far this fiscal year, there have been 10 managed care deals, with the total announced value of $15 million, though most financial information was not disclosed.

Hospital M&A activity is down slightly this quarter, with an 8 percent drop in deal volume in Q1 2015 over Q1 2014. Deal value, however, increased 14 percent this year from $608 million to $693 million, according to the report. The drop in volume may be partially accounted for by an uptick in nontraditional M&A, such as joint ventures and affiliations.

Overall long-term care deal volume plateaued, seeing 65 deals again this quarter. However, there was a notable drop in deal value this quarter to $1.7 billion from $5.7 billion in Q1 2014.

Other sectors that saw increased growth this year over Q1 last year include behavioral health, rehabilitation and physician practices. The physician practice sector also saw some growth, with 21 deals in Q1 2015, compared to 13 in Q1 2014. This growth was primarily seen in ER staffing and anesthesiology practices like MEDNAX, US Anesthesia Partners, and IPC The Hospitalists Company, which drove a great portion of the deals, according to the report.

 

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