Hospital M&A Activity Rises in Q2:2017, According To Data From HealthcareMandA.com

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Acquisition activity in the hospital market increased slightly in the second quarter of 2017, according to data from HealthcareMandA.com

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The hospital sector has seen a lot of interest from REITs in the last few months, and the deals are getting bigger than what we saw in 2016

Hospital M&A activity slowed in the second quarter of 2017, according to new acquisition data from HealthCareMandA.com. The number of hospital acquisitions rose to 23 in the second quarter, up 15% from the 20 publicly announced acquisitions in the first quarter of 2017, and up 15% from the 20 announced deals in the year-ago second quarter. Only four of the transactions disclosed a purchase price in the second quarter of 2017. The largest acquisition price announced was for $1.4 billion, as Medical Properties Trust, a healthcare-focused real estate investment trust (REIT), acquired the real estate assets of 10 IASIS hospitals and its behavioral health care facility. This deal is contingent on the completion of the merger between IASIS Healthcare and Steward Healthcare System. Both transactions were announced on May 19.

The largest group of acquirers were not-for-profit hospitals and health systems, with 12 acquisitions announced by 11 buyers. The Prime Healthcare Foundation, the not-for-profit arm of privately held Prime Healthcare Services, announced two acquisitions, as did publicly traded HCA Healthcare. Two REITs announced one acquisition apiece. Besides the Medical Properties Trust/IASIS deal, Global Medical Properties acquired a surgical hospital and a rehabilitation hospital in a single transaction. “The hospital sector has seen a lot of interest from REITs in the last few months, and the deals are getting bigger than what we saw in 2016,” stated Lisa Phillips, editor of the Health Care M&A Report, which publishes the data. “Private equity owners are seeing great benefit to selling their real estate holdings and concentrating on hospital operations.”

Among the sellers, two financially troubled publicly traded hospital companies divested 10 hospitals through four announced deals. Community Health Systems sold eight hospitals in the second quarter, and its 2016 spinoff, Quorum Health, sold two. HCA acquired two Houston-area hospitals from Community Health Systems, and three additional Houston-area hospitals in a separate deal with Tenet Healthcare.

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com investment research source. 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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Kate Wentworth
Irving Levin Associates
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