Hospital M&A Activity Slipped In Q2:2016, While Spending Rose, According To HealthcareMandA.com

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The hospital acquisition market posted a slight decrease in the second quarter of 2016, slipping 19% compared with the previous quarter. Dollar volume based on disclosed prices totaled $1.9 billion, an increase of 36% compared with the first quarter.

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Spending on hospital transactions in H1:16 rose 14%, to $3.3 billion, compared with $2.9 billion in the same period in 2015.

The hospital acquisition market posted a slight decrease in the second quarter of 2016, slipping 19% compared with the previous quarter. The 22 publicly announced hospital acquisitions were down 8% compared with the transaction volume in the year-ago second quarter. Dollar volume based on disclosed prices totaled $1.9 billion, an increase of 36% compared with the first quarter.

However, in the first half of 2016, 49 hospital deals have been announced, virtually even with the 48 deals announced in the first half of 2015. Spending on hospital transactions in H1:16 rose 14%, to $3.3 billion, compared with $2.9 billion in the same period in 2015.

The largest acquisition in the second quarter to come with a disclosed price was the $688 million acquisition of Healthe Care Australia Pty Ltd, a portfolio company of Archer Capital and one of Australia's largest private hospital operators. Its network of 17 hospitals with more than 1,800 beds provides inpatient, outpatient and community-based healthcare services. The buyer was Luye Medical Group, a division of China-based Luye Group, which also has a significant stake in Hong Kong-listed Luye Pharma Group Ltd.

“Now that the Centers for Medicare and Medicaid Services have published proposed regulations to support the Medicare Access and CHIP Replacement Act, some buyers may be waiting to see what the final regulations and time line will be,” said Lisa Phillips, Editor of HealthCareMandA.com, which publishes the data. “The fact remains that the players in this market still need scale to deal with the changes taking place.”        

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of HealthCareMandA.com. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the health care and senior housing M&A markets.
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Rachel Scinto
Irving Levin Associates
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