In the third quarter of 2024, private equity firms and their sponsored companies (PE buyers, collectively) announced 171 transactions in the healthcare M&A market, or approximately 34% of all the 504 announced healthcare deals, according to data captured in the LevinPro HC platform.
NEW CANAAN, Conn., Oct. 9, 2024 /PRNewswire-PRWeb/ -- In the third quarter of 2024, private equity firms and their sponsored companies (PE buyers, collectively) announced 171 transactions in the healthcare M&A market, or approximately 34% of all the 504 announced healthcare deals, according to data captured in the LevinPro HC platform.
This represents an 11% decrease in M&A volume from the second quarter of 2024, when 192 acquisitions from PE buyers were announced. However, activity in Q3:24 increased by 44% compared with data from Q3:23, when 119 PE buyer transactions were reported.
In Q3:24, disclosed spending totaled more than $16.3 billion across 12 deals with a PE buyer. The transaction with the largest purchase price was TowerBrook Capital Partners, LP and Clayton Dubilier & Rice's acquisition of R1 RCM Inc., a revenue cycle management company, for $8.9 billion. The deal with the second largest purchase price was The Carlyle Group's acquisition of Baxter International's kidney care segment for $3.5 billion in mid-August.
Physician Medical Groups (PMG) drew the highest of interest from PE buyers with 57 deals, accounting for more than 33% of all their activity in the healthcare space. However, this represents a 25% decline from Q2:24 when PE firms and their portfolio companies completed 77 PMG acquisitions and a 28% drop from the third quarter of 2023 when PE buyers completed 79 PMG deals.
In the PMG sector, PE groups targeted dental practices in more than 61% of the acquisitions, with 35 transactions. This is less than the reported activity in Q2:24 when 46 dental transactions were completed by a PE buyer, but activity was similar in Q3:23, when 32 deals were announced.
The second most popular PMG specialty for investors was the ear, nose, and throat (ENT) specialty, with four deals. This activity represents a noteworthy increase from the second quarter of the year when one ENT transaction was completed by a PE buyer. The most active PE buyer was Zenyth Partners' Align ENT + Allergy, which accounted for three of the four deals announced in Q3:24.
The most active PE-backed buyer was Heartland Dental, a portfolio company of KKR & Co. Inc., with seven deals in Q3:24. This marks a small decline from Q2:24 when Heartland Dental announced six transactions. The second most active PE buyer was Dental365, backed by The Jordan Company, which reported four transactions.
In addition to PMGs, significant PE investment was made in the Other Services sector, which tracks ancillary companies and providers in the healthcare space, totaling 46 transactions. The Other Services subsectors with substantial activity in the third quarter include healthcare product distributor (six deals), contract development manufacturing organization (six deals), medical outpatient building (five deals) and clinical trials (five deals).
Additionally, there was a significant amount of PE involvement in the eHealth space, with 32 deals reported during the second quarter of 2024. This is a prominent increase from Q2:24 when there were 24 transactions reported, and another increase from Q3:23 when 23 deals were announced. The most active eHealth subsectors in Q3:24 were medical practice management software and revenue cycle management, both with eight completed transactions.
In Q3:24, there were 12 PE-backed Laboratories, MRI and Dialysis transactions, seven Home Health & Hospice deals, four Medical Devices acquisitions and four Behavioral Health Care deals.
"Private equity investment continues to play a pivotal role in healthcare M&A space, despite notable macroeconomic headwinds," said Editorial Analyst Kate Humphrey. "Despite an overall decrease from the second quarter of 2024, PE-backed deals in the third quarter still account for a substantial share of healthcare transactions, and with the recent changes in interest rates, we could see an influx of deals to close out the year."
All quarterly results are published in The Health Care M&A Report, which is part of LevinPro HC, a research intelligence platform published by Irving Levin Associates, LLC. For information, or to order the reports, call 800-248-1668. 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 databases on the healthcare and senior housing M&A markets.
Media Contact
Dylan Sammut, Irving Levin Associates, 203-846-6800, [email protected], www.levinassociates.com
SOURCE Irving Levin Associates
Share this article