Decade in Review: Hospital M&A Deal Volume Increases, according to Deal Search Online

NORWALK, Conn.--(BUSINESS WIRE)-- Over $86.3 billion was committed to fund the 590 hospital takeovers that were announced during the 10-year period ended December 31, 2011, according to Deal Search Online. Earlier in the decade activity was sluggish due to a recession but the market rebounded and grew to the level of $35.5 billion in 2006. A similar response is occurring now as the M&A market continues to recover from the wake of damage left by the Great Recession, but general uncertainty is playing a role as well. In addition, larger hospitals and systems have been acquiring smaller ones in an attempt to gain pricing power and to prepare for the full implementation of health care reform.

Hospital Mergers and Acquisitions, 2002 to 2011
Year                   Number of Deals       Dollars Committed
2002                   56       $3,403,681,000
2003                   37       $2,341,550,000
2004                   59       $9,706,390,000
2005                   50       $2,905,729,000
2006                   55       $35,533,500,000
2007                   61       $9,257,130,000
2008                   60       $2,580,600,000
2009                   51       $1,813,600,000
2010                   75       $10,792,632,000
2011                   86       $7,938,260,000
Total                   590       $86,273,072,000

In 2011, the hospital sector posted a 10-year high in deal volume with 86 M&A transactions. The total dollars committed was $7,938,260,000, nowhere near the mammoth number that 2006 posted for the 10-year high, however. Large deals in the second quarter of 2011 were significant contributions to the annual total.

The five largest hospital transactions reported in 2011, according to Deal Search Online, are listed in the table below.

Five Largest Hospital Deals Of The Past 12 Months Value Quarter
1. Highmark acquired West Penn Allegheny $1.475 billion Q2:11
2. HCA acquired the remaining interest in HealthONE $1.45 billion Q2:11
3. Ascension Health acquired Alexian Brothers $645.0 million Q2:11
4. Health Management Associates acquired Mercy Health Partners $525.0 million Q3:11
5. Trinity Health acquired Loyola University Health System $475.0 million Q1:11

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KEYWORDS:   United States  North America  Connecticut

INDUSTRY KEYWORDS:   Health  Hospitals