NEW CANAAN, Conn., Jan. 10, 2025 /PRNewswire-PRWeb/ -- Hospital M&A activity declined in the fourth quarter of 2024, according to new acquisition data captured in the LevinPro HC platform. There were 15 transactions announced in the Hospital sector in Q4:24, an approximate 29% decrease from activity in Q3:24 when 21 deals were announced. Fourth quarter activity was also lower than volume in Q4:23, when 18 Hospital deals were announced.
"We're not surprised deal volume has slowed down, considering the tough market conditions of the year," said Dylan Sammut, Editor of Health Care at Irving Levin Associates, which publishes the data on its LevinPro HC platform. "From inflation, cyberattacks, labor challenges and more, there were enough headwinds to force health systems to slow down their M&A strategies."
Preliminary results for annual deal volume tell a similar story. In 2024, there were 69 hospital transactions, compared with 76 in 2023. In February, the LevinPro HC team will publish the Health Care Services Acquisition Report, which will cover the 2024 Hospital M&A market in much more depth.
Most of the deal activity in the fourth quarter came from divestments from large health systems. Community Health Systems sold two hospitals in Florida, ShorePoint Health Punta Gorda and ShorePoint Health Port Charlotte, for a combined price of $265 million to AdventHealth. This transaction is among the additional potential divestitures discussed on Community Health Systems' third quarter 2024 earnings call and in subsequent public appearances.
Several deals in the fourth quarter were the result of the ongoing Steward Health Care bankruptcy case. Insight Health System purchased Trumbull Regional Medical Center in Warren, Ohio for an undisclosed sum; Quorum Health Group acquired two of Steward's hospitals in Texas, Scenic Mountain Medical Center and Odessa Regional Medical Center, and HonorHealth bought three Steward hospitals in Arizona.
Investors and strategic buyers acquired a wide range of hospital types in the fourth quarter. There were six deals targeting short-term acute care hospitals (10 facilities in total), two deals for community hospitals, two for surgical hospitals, two for specialty hospitals and one targeting a micro-hospital. There were two mergers involving health systems. Sanford Health and Marshfield Clinic Health System completed their negotiations and finalized a deal, which involves Sanford investing $500 million over five years to support strategic capital improvements at Marshfield. In the second deal, Summa Health was acquired by Health Assurance Transformation LLC for $485 million. Health Assurance Transformation LLC acquires and operates hospitals and health systems nationwide and is backed by the private equity firm, General Catalyst.
Most fourth-quarter transactions targeted systems and organizations with more than 100 beds and several facilities. In the 15 deals announced in Q4:24, more than 3,700 beds and 33 hospitals were acquired or involved in a merger.
"There are positives on the horizon," continued Sammut. "Recent market reports have showed a rebound of finances and margins for systems across the country, so maybe we'll finally see some stability in 2025."
All quarterly results are published in The Health Care M&A Report, which is part of the Irving Levin Associates and LevinPro investment research source. For information, or to order the reports, call 203-846-6800. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut, and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains healthcare and senior housing M&A markets databases.
Media Contact
Dylan Sammut, Irving Levin Associates, 203-846-6800, [email protected], www.levinassociates.com
SOURCE Irving Levin Associates
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