Hospital mergers steady at start of 2016, though dollar amount wanes, report finds
Irving Levin Associates report finds M&A total dropped 67 percent to $1.2 billion.
Capella Healthcare’s $550 million merger with Medical Properties Trust by RegionalCare Hospital Partners took the top spot for highest deal price in the quarter.
Hospital merger and acquisition activity held steady in the first quarter of 2016, according to data from Irving Levin Associates, though the total dollar volume of these deals dropped 67 percent to $1.2 billion.
The first quarter saw 24 hospital acquisitions, the report said, the same number seen in the fourth quarter of 2015.
Capella Healthcare's $550 million merger with Medical Properties Trust by RegionalCare Hospital Partners took the top spot for highest deal price in the quarter. The new company has been named RCCH Health Partners, and has 18 hospital campuses in 12 states with more than 13,000 employees, 2,000 affiliated physicians and $1.7 billion in revenue.
[Also: RegionalCare Hospital Partners and Capella Healthcare to merge, form $1.7 billion system]
The behavioral healthcare acquisition market logged eight transactions in the first quarter of 2016, the report said, a 38 percent drop in the number of transactions from the fourth quarter of 2015, which was an unusually active quarter for the behavioral healthcare M&A market.
Most of the behavioral healthcare transactions were small, and only one had a disclosed price in the first quarter of 2016. Acadia Healthcare Group purchased United Kingdom-based Priory Group for $2.22 billion in one of the largest behavioral health acquisitions ever completed.
The most active buyer in the quarter was Summit BHC, which completed two acquisitions. It bought St. Joseph Institute, a 40-bed residential addiction treatment center in Pennsylvania, and Turning Point, a 106-bed treatment center also in Pennsylvania.
[Also: Tracking 2015 mergers and acquisitions]
"The consistent deal volume from one quarter to the next, and year-over-year, shows the hospital sector has stabilized in the wake of changes caused by the Affordable Care Act," said Lisa Phillips in a statement. Phillips is editor of the Health Care M&A Report, which publishes the data.
"Now we are waiting see what impact the Medicare Access and CHIP Replacement Act will have on this market in the future," she said. "This market will see continued consolidation occurring in large and small markets."
Twitter: @JELagasse
