Hospital Merger and Acquisition Activity Rises in First Quarter of 2016, According to Kaufman Hall Analysis
Number of First Quarter M&A Transactions in 2016 Grows 13.0% Compared with Q1 2015
Skokie, IL, June 1, 2016—Hospital merger and acquisition activity continued to rise in the first quarter of 2016, according to the latest analysis by Kaufman, Hall & Associates, LLC, a leading provider of strategic, capital, financial, and transaction advisory services and software tools. Kaufman Hall identified 26 hospital and health system transactions in the first quarter of 2016, an increase of 13 percent compared to 23 transactions announced in the first quarter of 2015.
The sustained growth comes after the close of a busy year with 112 total hospital transactions in 2015, up 14 percent from 2014. The steady uptick in activity demonstrates providers’ continued use of mergers, acquisitions, and other forms of partnerships to enhance capabilities as the healthcare system transitions toward a value-based business model.
More observations of note from transactions in the first quarter of 2016 include:
- Nineteen (73.1 percent) of the 26 transactions in the first quarter of 2016 involved not-for-profit organizations, while seven (26.9 percent) involved acquisitions by for-profit organizations.
- The transactions included the acquisition of four not-for-profit, publicly owned hospitals.
- Seven of the transactions involved acquisitions by religious-affiliated organizations.
- Texas was the state with the most activity, with four first-quarter transactions.
- The largest deal announced was the merger of Capella Healthcare, Inc., and RegionalCare Hospital Partners, Inc. Capella is based in Frankin, Tenn., and operates 10 acute care and specialty hospital facilities in five states, and RegionalCare encompasses eight community hospitals in seven states. The new, combined company has 16 regional health systems in 12 states with more than 13,000 employees, 2,000 affiliated physicians, and $1.7 billion in revenues, according to a press release.