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Size of organizations in mergers continues to grow, study finds

As healthcare merger and acquisition activity continued to increase in 2018, the average size of organizations participating in mergers also grew, according to Kaufman Hall's "2018 M&A in Review: A New Healthcare Landscape Takes Shape."

The study found that the average annual revenue of sellers, the smaller of two organizations in a merger, was $409 million in 2018. This represents an average annual growth of 13.8 percent since 2008, when the average annual revenue of sellers was just over $100 million.

"What we're seeing is a move toward strategic growth, driven in part by the need to acquire expertise and resources to manage the industrywide changes facing hospitals and health systems," said Anu Singh, managing director at Kaufman Hall. "These include changes in payment and care delivery models and the push for greater value, but also the emergence of new competitors that bring significant capital resources and strong capabilities in both digital technology and consumer experience to healthcare."

More articles on transactions and valuation:

Cleveland Clinic adds 4 hospitals
CHS divests 2 South Carolina hospitals
AHA finds hospital proximity matters in reaping merger benefits

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