Healthcare M&A to continue in 2015, KPMG survey says
Respondents point to the Affordable Care Act, which has led to consolidations as value and coordination is rewarded under the law.
Mergers and acquisition activity in the health and life sciences sector is expected to keep gaining momentum in 2015, a new survey released Tuesday claimed.
“Technology, regulation, consumerism and pushback from employers and government payers are reshaping all facets of healthcare, forcing companies to review all of their options,” said KPMG advisor Bill Baker in a statement. “The capital markets – low interest rates and strong valuations – are creating favorable conditions for those considering selling or divesting assets.”
Respondents to the KPMG survey placed the biopharmaceutical sector second behind technology when it came to M&A expectations for 2015, while 27 percent said the healthcare sector would see more consolidation.
When it comes to healthcare providers, as well as insurance companies, respondents said M&A is directly driven by the Affordable Care Act, which has led to consolidations as value and coordination is rewarded under the legislation.
Easy credit access and larger stockpiles of cash also drive mergers, the survey concluded.
The KPMG M&A Outlook Survey polled 738 financial executives.
Though M&A deals are expected to rise, healthcare companies expect more due diligence coming out of provider mergers and acquisitions since health systems can be very complicated organizations.
“Managing the various stakeholders of ownership, employees, customers and vendors during an integration process can be daunting and, if not executed on properly, can destroy the very benefits the transaction was modeled on generating,” Baker said.
“It is imperative that the process is managed to make the transaction smoother and less disruptive.”
