Research Report

M&A Quarterly Activity Report: Q2 2021

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Merger and acquisition teams

Merger and acquisition activity for the second quarter of 2021 included 14 transactions. At $8.5 billion, total transacted revenue for Q2 remains high, as health systems focus less on acquisitions of smaller independent hospitals and more on regional partnerships with systems in new markets. This trend is reflected in the fact that, year to date (Q1 and Q2 combined), total transacted revenue in 2021 is the second highest in recent years, despite significantly fewer transactions (Figure 1).

For-profit health systems are maintaining their focus on building strong regional markets and divesting hospitals outside of their core business regions. A significant portion of Q2 activity was concentrated in the Southeast, with Georgia alone accounting for three transactions involving eight hospitals and approximately $1.5 billion in transacted revenue.

Figure 1: Total Transactions and Transacted Revenue for Q1 and Q2 Combined, 2015 – 2021

PM&A Q2 2021 Figure 1

The most significant transactions for Q2 2021 included the following:

  • Spectrum Health and Beaumont Health in Michigan announced their intention to form a combined system that would have approximately $13 billion in annual operating revenue.
  • Tenet Healthcare announced plans to sell five hospitals in south Florida’s Miami-Dade and Broward Counties to Steward Health Care System.
  • Piedmont Healthcare announced plans to acquire four Georgia hospitals from HCA Healthcare; in a separate announcement, University Health Care System in Augusta, Ga., stated its intention to join Piedmont Health.
  • HCA Healthcare also plans to sell a fifth north Georgia hospital—Redmond Regional Medical Center in Rome, Ga.—to Florida-based AdventHealth.
  • Mississippi-based Rush Health Systems announced plans to merge with Louisiana-based Ochsner Health.
  • The Medical University of South Carolina (MUSC) announced its intention to purchase three hospitals in Richland County—home of Columbia, South Carolina’s capital—and adjacent Kershaw County from LifePoint Health.

Overview of Q2 Activity

With 14 announced transactions, activity by number of transactions in Q2 2021 was below recent pre-pandemic historical averages (Figure 2). Consistent with observations in Q1 2021, the smaller number of transactions is offset by a high number of transactions with seller revenues above $500 million. There was one “mega merger” announced in Q2 2021 (Beaumont Health System and Spectrum Health), in which the smaller partner or seller has average annual revenues in excess of $1 billion, as well as three transactions with seller revenues between $500 million and $1 billion.

Figure 2: Number of Q2 Announced Transactions by Year

PM&A Q2 2021 Figure 2

Average seller size by revenue for Q2 2021, $604 million, is well above historical averages for the second quarter and for recent year-end averages (Figure 3). The average size of the quarter’s transactions is also reflected in total transacted revenue for the quarter, which at $8.5 billion is fourth among historical second quarter figures (Figure 4).

Figure 3: Average Seller Size by Revenue ($ in Millions), Q2 2021 Compared With 2015 – 2020 Year-end Averages

PM&A Q2 2021 Figure 3

Figure 4: Total Q2 Transacted Revenue ($s in Billions) by Year

PM&A Q2 2021 Figure 4

For-profit health systems were the acquirer in two of the 14 announced transactions, academic medical centers or university affiliates were the acquirer in three, and religiously sponsored systems were the acquirer in one. Other not-for-profit systems were the acquirer in the remaining eight transactions.

The Benefits of Regionalization

Many of this quarter’s most significant transactions reflect the trend toward regionalization, with an emphasis on building depth within local markets and breadth through expansion to neighboring geographies. The Spectrum Health and Beaumont Health merger in Michigan, for example, will combine markets in western and southeastern Michigan, while Piedmont’s separate transactions with HCA Healthcare and University Health Care System will both deepen its presence in north Georgia and extend its services to the Macon and Augusta markets. MUSC’s acquisition of three hospitals from LifePoint Health in South Carolina’s Midlands region continues the system’s expansion of services from coastal South Carolina, building upon its recent acquisition of four hospitals from CHS in northern South Carolina. The merger of Rush Health Systems and Ochsner Health will bring together systems in neighboring states, as will Florida-based AdventHealth’s acquisition of Redmond Regional Medical Center in Georgia.

Moves by for-profit systems to divest hospitals in markets where they do not have a strong presence are being matched by transactions that build their strengths in core regional markets. While HCA is selling its hospitals in north Georgia, for example, it is building its presence in southeast Georgia. Tenet is maintaining its ambulatory services in Miami-Dade and Broward Counties, and its hospitals in Palm Beach County. Investors are recognizing and rewarding investor-owned systems’ focus on their core businesses and markets.[i]

For health systems, a focus on regionalization facilitates the sharing of resources within a defined geography, a capability that proved particularly valuable during the heights of the COVID-19 pandemic. A robust regional market presence positions health systems to partner with health plans and local employers by offering the necessary scale for population-health-focused initiatives and cross-market access for employees at work and at home. Consumers and local communities also benefit. For example:

  • Spectrum Health will be able to expand the health plan offerings of its Priority Health subsidiary into southeastern Michigan, increasing consumer choice in the local health plan market.[ii]
  • Ochsner plans to expand specialty services and provide access to its clinical research network for Rush patients and raise the minimum wage for Rush employees.[iii]
  • MUSC’s acquisition enables it to expand its footprint in rural and underserved counties in South Carolina.[iv]

The trend toward regionalization also aligns with a trend we noted in our Q1 2021 report: The importance of local knowledge. Even in neighboring geographies, local market conditions can vary significantly. Partnerships with well-established organizations can preserve and leverage local knowledge within a newly combined organization or new venture.

Looking Forward

As health systems enter what we hope will be a relatively uninterrupted period of stabilization and normalization, the long-term impacts of the pandemic in such areas as care delivery, clinical and administrative workforce, and utilization of services will become clearer. These impacts likely will require new strategies and new partnerships; at the same time, they may render obsolete plans that were in the works before the pandemic. We anticipate that as health systems reemerge from the pandemic, they will pursue strategic partnerships that enable them to focus on their own core strengths, while expanding the services they offer to their communities and differentiating their value for consumers, employers, and other key stakeholders.


Anu Singh, Managing Director and Leader of the Partnerships, Mergers & Acquisitions Practice,

Kris Blohm, Managing Director,

Nora Kelly, Managing Director,

Courtney Midanek, Managing Director,

Chris Peltola, Assistant Vice President,

Blake Dorris, Senior Associate,

For media inquiries, please contact Haydn Bush at

[i] Spegele, B.: “Hospital Stocks’ Rally Points to Post-Covid Growth.”The Wall Street Journal, June 24, 2021.

[ii] Spectrum Health: “Spectrum Health and Beaumont Health Take First Step Toward Creating a New Health System For Michigan, By Michigan.” Press release, June 17, 2021.

[iii] Ochsner Health: “Rush Health Systems to Join Ochsner Health.” Press release, June 17, 2021.

[iv] Medical University of South Carolina: “MUSC Board Votes to Acquire Providence Health and KershawHealth.” Press release, June 25, 2021.

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