Hospital mergers and acquisitions in the United States declined in 2013, but the number of hospitals and hospital beds involved in those transactions hit a five-year high, according to the 2014 Health Care Services Acquisition Report.
M&A activity in 2013 was paced by the acquisition of Health Management Associates by Community Health Systems for $7.6 billion and the sale of Vanguard Health Systems to Tenet Healthcare for $4.3 billion, the year's two largest Hospital sector deals.
"Those two acquisitions alone accounted for more than one-third of the hospitals sold in the U.S. in 2013," said Lisa E. Phillips, an editor at Norwalk, CT-based Irving Levin Associates, which compiles the annual report.
Usually, Phillips said, beds owned by not-for-profits dominate the hospital M&A market, but because of those two billion-dollar deals last year, 78% of the target hospitals in 2013 were for-profit, compared with between 25% and 30% in a more typical year.
Globally, the dollar value of M&A activity across nine healthcare industry service sectors, including managed care and pharmaceuticals, increased by 1.8% to $52.7 billion in 2013. However, the number of transactions declined by 5.8% to 598 publicly announced healthcare services mergers and acquisitions in 2013.
In terms of number of M&A transactions, all but the long-term care and home health/hospice sectors posted declines in 2013 compared with 2012. The hospital sector declined 21.5% in deal volume to 84 announced acquisitions, which includes one large transaction in Germany, the report said.