April 19, 2017

Report: Health care M&A deals rise in 1Q

Healthcare merger and acquisition activity in the first quarter of 2017 rose 7 percent over the fourth quarter of 2016 and 6 percent over first quarter 2016, according to a report from HealthCareMandA.com.

There were 395 transactions in the first quarter. Combined spending on deals reached $58.7 billion, an increase of 56 percent compared with the $37.8 billion spent in the previous quarter, the report said. First quarter deal value was down 27 percent compared with $80.9 billion spent in first quarter 2016.

Healthcare services represented 59 percent of the first quarter's transaction total, lower than the 62 percent share reported in the previous quarter, and the year-ago quarter. The decline is due to slowdowns in M&A activity in two of the services sectors, hospitals, down 17 percent from the fourth quarter, and long-term care, down 22 percent. The behavioral health care and physician medical group sectors, however, posted higher deal-making activity compared with the fourth quarter of 2016, up 50 percent and 78 percent, respectively.

On the technology side, transaction growth was strong in the biotechnology and eHealth sectors, up 11 percent and 57 percent, respectively, compared with the previous quarter.

"The first quarter was dominated by Congress's repeal and replacement attempt of the Affordable Care Act, which produced winners and losers among the healthcare sectors," Lisa E. Phillips, editor of HealthCareMandA.com, said in a news release. "The uncertainty created headwinds in the hospital and managed care sectors. The eHealth sector was unaffected, because technology is at the heart of all aspects of health care today."

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of HealthCareMandA.com. Norwalk-based Irving Levin Associates Inc. publishes the research reports and maintains databases on the health care and senior housing M&A markets.

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