With deals being generated by favorable credit markets and cash-rich balance sheets, mergers and acquisitions in the healthcare industry are expected to continue unabated next year, according to results from the KPMG M&A Outlook survey.
The results included survey responses from 738 U.S.-based finance officers and M&A professionals covering a variety of industries. Twenty-seven percent of the respondents said they saw healthcare providers as "being ripe for consolidation," with healthcare only trailing technology, pharmaceuticals, and the oil and gas industry.
"We see a convergence of factors facing providers, health plans, and drug and device makers that are forcing them to make tough decisions about strategy and those decisions sometimes entail selling the business," said Bill Baker, an advisory partner who oversees transactional services in the healthcare and life sciences practice at KPMG. "The capital markets — low interest rates and strong valuations — are creating favorable conditions for those considering selling or divesting assets."
The response to the Patient Protection and Affordable Care Act along with the need for consolidation of core businesses and competition will be some of the biggest drivers of M&A activity for healthcare providers and payers next year, according to the report.
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