Healthcare M&A volume up, spending down in 2016

BVWireIssue #173-1
BVWireIssue #173-1
February 1, 2017

The healthcare merger and acquisition market was up slightly in 2016 in terms of deal volume, but overall spending was down 36% from 2015, according to data from Irving Levin Associates Inc. There were 1,536 transactions in 2016, up 1% from 2015, but overall spending dropped to $255.7 billion from $400.3 billion in 2015. Healthcare sectors showing the biggest jumps in deal volume include eHealth (up 23%), rehabilitation (up 21%), and physician medical groups (up 19%). The biggest declines were in managed care (down 53%), labs/MRI/dialysis (down 21%), and hospitals (down 12%).

The strong M&A market for physician groups is likely to continue due to the uncertainty surrounding the potential repeal and replacement of the Affordable Care Act. These groups have partnered with hospitals because they see a difficult time ahead, especially if they have not developed a specialty niche.

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