Health Care M&A Volume Slipped 3% In Q4 2019, Survey Finds

Health care merger and acquisition activity essentially held steady in the fourth quarter of 2019, compared with the third quarter. The number of deals announced fell 3%, to 442, compared with the previous quarter's 456 transactions, and was 12% lower than the 504 deals announced in the same quarter in 2018.

Combined spending in the fourth quarter totaled $63.4 billion, up 22% compared with the previous quarter's $52.1 billion. It was 47% greater than the approximately $43.1 billion reported in the same quarter in 2018, according to HealthCareMandA.com

Healthcare services transactions made up 69% of the fourth quarter's deal volume, similar to the previous four quarters. The Long-Term Care sector once again ranked the busiest, with 110 deals and a 25% share of the quarter's transaction total. Year-over-year, two of the services sectors posted impressive gains--Home Health & Hospice (+40%) and Managed Care (+200%). Combined spending on the services side accounted for only 38% of the quarter's total, approximately $24 billion, based on disclosed prices.

Healthcare technology deals accounted for 31% of the fourth quarter's deal volume. The eHealth sector was the busiest, posting 63 deals to make up 14% of the quarter's total. Year-over-year, eHealth was the only technology sector to post an increase in deal volume, up 9% compared with the fourth quarter of 2018. Combined spending among the technology sectors was $39.4 billion.

"Fourth-quarter deal volume was strong, thanks to a busy December," said Lisa E. Phillips, editor of HealthCareMandA.com. "Heading into 2020, we expect another strong year in the healthcare market--at least until the November elections."

As healthcare mergers and acquisitions go, 2019 was another good year. Preliminary data show a total of 1,774 deals announced, the second-highest on record. The total is just 7% lower than 2018's record of 1,908 transactions.

Last year's spending total is another story, and one for the record books. Preliminary data show $401.7 billion went to finance healthcare deals in 2019, and that's just disclosed spending. Not only is that a record, it beat the previous record ($333.3 billion, set in 2018) by 21%.

All quarterly results are published in The Health Care M&A, which is part of the HealthCareMandA.com investment research source. Sector-specific research and analysis can be found at Levin Associates 2019 Sector Reports. For information, or to order the report, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has headquarters in Norwalk, Connecticut.