Twenty-seven hospital merger and acquisition transactions have been introduced within the third quarter of 2024, the best Q3 quantity seen since 2017, in accordance with the newest merger and acquisition (M&A) report from the Chicago-based Kaufman Corridor consulting and advisory agency, printed on Oct. 3.
In line with Kaufman Corridor, “Nearly half the exercise within the third quarter resulted from the Steward Well being Care chapter, together with one among 4 mega-mergers for the quarter. Complete transacted income for Q3 2024 reached a excessive of $13.3 billion.”
Kaufman Corridor notes that “One of many 11 transactions associated to the Steward chapter—Well being Care Methods of America’s assumption of operations at eight hospitals in Florida, Louisiana, and Texas—was among the many 4 “mega merger” transactions introduced in Q3 (transactions during which the annual income of the vendor, or smaller get together, exceeds $1 billion). The opposite three mega mergers have been:
Florida-based Orlando Well being’s introduced acquisition of Alabama-based Brookwood Baptist Well being from Tenet
Prime Healthcare’s deliberate acquisition of eight Ascension-owned hospitals in Illinois
The supposed mixture of South Dakota-based Sanford Well being and Wisconsin-based Marshfield Clinic Well being System.”
Kaufman Corridor specialists anticipate massive nationwide well being techniques to proceed adjusting their portfolios to assist investments and meet altering group wants. Many well being techniques are increasing into new geographic areas for alternatives to associate with others.
“Whereas the growing variety of transactions in Q3 2024 is getting us again to a traditional stage of exercise, we’re observing numerous challenges and alternatives out there,” stated Anu Singh, managing director and Mergers & Acquisitions follow chief with Kaufman Corridor, in releasing the report on Thursday. “The motivations for coming into into transactions and partnerships fluctuate. As we’re seeing the variety of strategic transactions speed up, we’re additionally seeing some organizations that face monetary challenges are struggling to discover a associate.”
The Kaufman Corridor specialists notice additionally that, “Though there have been 4 mega merger transactions in Q3 2024, the excessive general transaction quantity introduced down the common dimension of the vendor (or smaller get together) by annual income from an historic excessive of $984 million in Q2 2024 to $492 million in Q3. As proven in Determine 2, this quantity is in step with current year-end averages (excluding the very excessive year-end averages seen in 2021 and 2022).”
Considerably, the Kaufman Corridor specialists notice that, “Underlying the excessive stage of introduced transactions in Q3 2024 is a extra troubling message: the excessive stage of financially struggling organizations which might be having issue discovering a associate. The Steward Well being Care chapter raised the prospect of hospital closures, and state governments in Arizona and Massachusetts expressed gratitude that established well being techniques of their communities have been keen to tackle hospitals that wanted a associate to outlive. There’s a a lot bigger universe of struggling hospitals past Steward, as illustrated by different Q3 transactions. In most situations, approving a mix—even with a hospital or well being system in the identical market—is more likely to be a greater resolution than closure.”
The report’s chief writer was Anu Singh, with contributions from Nick Bidwell, Kris Blohm, Nick Gialessas, Nora Kelly, Eb LeMaster, Courtney Midanek, Chris Peltola, and Rob Gialessas.
The total report might be discovered right here.
