Health care merger and acquisition activity closed out last year on a high note despite lower volume on a yearly basis, bolstered by home health and hospice transactions.
The home health and hospice sector logged a 100% increase in deal volume from the third quarter to end 2013, according to Irving Levin Associates’ Health Care M&A News.
Overall health care deal volume was up 4% in the final months of 2013 compared to the third quarter with 281 transactions announced, down from 310 in 2012. While the fourth quarter represented the year’s highest level of dealmaking, the value decreased 16% from the previous quarter to $43.6 billion. Still, that marks a 79% increase from deal value in the fourth quarter of 2012.
Several health care segments saw gains in the fourth quarter, with Home Health & Hospice up 100%, followed by Rehabilitation, up 50%, and Long-Term Care, up 10%, suggesting a trend toward post-acute care, according to Irving Levin. On a yearly basis, Home Health & Hospice was up 11% from nine deals to ten.
Volume in the Hospital sector, meanwhile, dropped 13% in the fourth quarter, down 43% from the previous year, while Managed Care was down 33% on both a quarterly and annual basis.
“The health care market is moving beyond the uncertainty that surrounded implementation of the Affordable Care Act,” said Lisa E. Phillips, editor of Health Care M&A News, in a statement. “Acquirers now are investing in improving patient outcomes, whether it’s buying a long-term care facility or a data analytics company that will help to streamline operations and contain costs.”
Irvin Levin expects M&A activity to maintain its pace in 2014 and said deals will be influenced by the impact of certain regulations and new laws governing health insurance.
Written by Alyssa Gerace