Ups and downs in healthcare M&A, per Levin data

BVWireIssue #218-1
November 4, 2020

M&A transactions, mergers and acquisitions (M&A), healthcare appraisal, healthcare multiples, benchmark, industry analysis

Different sectors in healthcare experienced different levels of mergers and acquisitions activity in the third quarter of 2020, according to new acquisition data from Irving Levin Associates.

E-health up: COVID-19 is not fazing investors in e-health, with 58 transactions reported in 3Q20, a 17% increase compared with the previous quarter’s 51 deals. Twenty-seven deals disclosed a price in the third quarter, totaling $20.8 billion, which eclipses the $606 million in announced spending for the second quarter. The largest deal in the sector was Teladoc Health Inc.’s merger with Livongo Health Inc., valued at $18.5 billion. “Changes made to delivering health care since March have boosted interest in areas such as telehealth and remote patient monitoring,” says Lisa E. Phillips, editor of the Health Care M&A Report, which publishes the data.

Hospitals down: On the other hand, hospital M&A activity fell sharply in the third quarter of 2020, with only 10 transactions reported in the third quarter, a 55% drop compared with the previous quarter’s 22 deals. Deal volume was down 66% compared with the third quarter of 2019, when 29 transactions were announced. Only one deal disclosed a price in the third quarter, totaling $207 million. That figure is 66% lower than the previous quarter’s $601.8 million reported deal value and 96% below the $5.3 billion recorded in the third quarter of 2019. “The 10 deals that made it to the definitive agreement stage in the third quarter involved only 11 hospitals,” says Phillips. “A year earlier, we saw 79 hospitals trade hands in 29 deals.”

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