Hospital transaction volume levels in 2015 are expected to be similar to 2014, spurred by the current healthcare environment and favorable lending conditions for acquirers/deal partners, according to global consulting firm PwC's 2014 US Health Services Deals Insights and 2015 Outlook, an analysis of M&A activity in the sector.
Although hospital deal volume in 2014 declined since the high of 2012 (94 transactions in 2012 to 79 in 2014), there was a significant increase in the fourth quarter with more than half of the 2014 transactions occurring during that time, according to the report.
Total disclosed transaction value in 2014 was approximately $2.2 billion, although many of the 2014 transactions did not have a disclosed value as they were private or nonprofit transactions, according to the report. The largest transaction with a disclosed value was Brentwood, Tenn.-based Duke LifePoint Healthcare's acquisition of Conemaugh Health System in Johnstown, Pa., for $500 million.
Hospitals represented a portion of the PwC report, which also looked at managed care, post-acute care, physician practices, private equity and other services. The report showed that the overall pace of health services deal activity in 2014 started strong and ended stronger, and is expected to continue through 2015.
The report found that the total value of health services M&A deals in the U.S. rose 18.4 percent to $61 billion in 2014 compared to $51.5 billion in 2013. Additionally, it found that the long term care sector led 2014 with a record of 288 deals worth $29.2 billion.
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