, March 24, 2020
/PRNewswire-PRWeb/ -- Merger and acquisition activity in the healthcare industry's services sectors in 2019 rose slightly above deal volume posted the year before, according to The 2020 Health Care Services Acquisition Report, Twenty-Sixth Edition. Deal volume for the healthcare services sectors reached 1,269 transactions, 2% higher than the 1,242 in 2018.
The dollar value of those deals was significantly lower, however, down 27% to $91 billion
, compared with $124 billion
in 2018. One deal accounted for a significant portion of 2018's spending, however. That was Cigna's $67 billion
acquisition of Express Scripts Holding in March 2018
. Without it, 2018's combined spending would have totaled just $57 billion
, and 2019's total would be 60% higher.
"In 2019, we heard serious discussions about when—not if—an economic recession would hit. Many investors turned to health care services as a 'safe haven'," said Lisa E. Phillips
, editor of the 2020 Health Care Services Acquisition Report. "Last year, health care services deals accounted for 69% of all healthcare transactions, compared with 65% in 2018. Given the current global pandemic, we probably won't see that repeated in 2020."
Some services sectors fared better than others in year-over-year transaction totals. Merger and acquisition activity increased in Hospitals (+22%), Other Services (+11%), Managed Care (+8%), Home Health & Hospice and Long-Term Care (+5% each) and Laboratories, MRI & Dialysis (+4%). Three sectors saw declines in activity, including Rehabilitation (-20%), Behavioral Health Care (-19%) and Physician Medical Groups (-6%). "Investors' rush into certain sectors in 2018 pushed valuations to record levels, which is why we saw some softness in Behavioral Health and Physician Medical Groups by 2019," Phillips added. "Due to the coronavirus crisis, valuations will likely drop in 2020, at least through the third quarter."
The 2020 Health Care Services Acquisition Report, Twenty-Sixth Edition, contains more than 470 pages of hard-to-find information on all publicly announced hospitals, managed care, laboratory services, physician medical group, behavioral health, home health and hospice, and rehabilitation mergers and acquisitions in 2019. The Long-Term Care sector is treated separately in The 2020 Senior Care Acquisition Report. Irving Levin Associates is a Norwalk, Connecticut
-based research and publishing firm specializing in health care investments. The Health Care Services Acquisition Report may be purchased for $695
by calling 800-248-1668.
SOURCE Irving Levin Associates