Hospital M&A saw an increase of activity in the third quarter of 2024. According to new acquisition data captured in the LevinPro HC platform, there were 21 transactions announced in the Hospital sector in Q3:24, an approximately 24% increase from activity in Q2:24 when 17 deals were announced. Third quarter activity, however, was 12% lower than Q3:23 volume, when 24 deals were announced.
NEW CANAAN, Conn., Oct. 10, 2024 /PRNewswire-PRWeb/ -- Hospital M&A saw an increase of activity in the third quarter of 2024. According to new acquisition data captured in the LevinPro HC platform, there were 21 transactions announced in the Hospital sector in Q3:24, an approximately 24% increase from activity in Q2:24 when 17 deals were announced. Third quarter activity, however, was 12% lower than Q3:23 volume, when 24 deals were announced.
Announced spending reached $4.1 billion in Q3:24, more than double compared with the second quarter of 2024, which had $2.0 billion in announced spending, and more than 83% higher compared with the third quarter of 2023, which had $2.25 billion in announced spending.
The surge in announced spending in the third quarter can be attributed to the string of divestments from large health systems. In the largest deal of the third quarter by price, Tenet Healthcare Corporation sold its majority stake in Brookwood Baptist Health in a $910 million cash sale to Orlando Health, which has been scaling up its presence across several markets throughout the year.
Several deals in the third quarter were the result of the ongoing Steward Health Care bankruptcy case. Five of Steward's hospitals were sold in the third quarter: Pafford Health Systems, Inc. purchased Wadley Regional Medical Center at Hope (Hope, AR), AHS South LLC bought Glenwood Regional Medical Center (West Monroe, LA) and Orlando Health paid nearly $440 million to win an auction for three of Steward's hospitals in Florida.
Investors and strategic buyers acquired a wide range of hospital types in the third quarter. There were eight deals targeting short-term acute care hospitals (16 facilities in total), three deals for critical access hospitals and two for long-term acute care hospitals (LTACHs), a rare sight in the M&A market because of low demand from investors. Ventas, Inc. purchased five undisclosed LTACHs from Kindred Healthcare, LLC for $189 million, and Prime Healthcare Services, Inc. bought a mixed portfolio of Illinois hospitals from Ascension for an undisclosed price, including Ascension Holy Family, the only LTACH in Northwest Chicagoland.
Most third-quarter transactions targeted systems and organizations with more than 100 beds and several facilities. In the 21 deals announced in Q3:24, more than 4,400 beds and 25 hospitals were acquired or involved in a merger.
"If 2023 was the year of health systems merging and trying to scale up, we would say 2024 has gone in the opposite direction," said Dylan Sammut, Editor of Health Care at Irving Levin Associates, which publishes the data on its LevinPro HC platform. "Whether to exit non-core markets, balance a portfolio or pay off debts, it seems like health systems are making efforts to scale down. We expect these strategies to drive up M&A volume as we close out 2024."
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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