Health Care M&A Volume Falls in Q3:2019, According to HealthCareMandA.com

Health care merger and acquisition activity slowed compared with the second quarter. The number of deals announced fell 13%, to 408, compared with the previous quarter and was 15% lower than the 478 deals announced in the same quarter in 2018. Combined spending in the third quarter totaled $51.5 billion, down 63% compared with the previous quarter’s extraordinary $139.1 billion. It was 65% greater than the $31.1 billion reported in the same quarter in 2018, according to HealthCareMandA.com.

Healthcare services transactions represented 67% of the third quarter’s deal volume, similar to the previous four quarters. The Long-Term Care sector once again ranked the busiest, with 101 deals and a 25% share of the quarter’s transaction total. Year-over-year, only two sectors posted gains—Hospitals (+17%) and Managed Care (+29%)—and Rehabilitation remained the same. Combined spending accounted for only 38% of the quarter’s total, approximately $19.6 billion, based on disclosed prices.

Healthcare technology deals accounted for 33% of the third quarter’s deal volume. The eHealth sector was the busiest, posting 53 deals and making up 13% of the quarter’s total. Year-over-year, eHealth was the only one of the technology sectors to post an increase in deal volume, up 43% compared with the second quarter of 2018. Combined spending among the technology sectors was more than $31.9 billion.

“The third quarter’s deal volume didn’t end on the up-note we expected when the quarter began,” said Lisa E. Phillips, editor of HealthCareMandA.com. “The two interest rate cuts from the Federal Reserve didn’t offset the growing talk of a recession and slowing economic growth in the European Union and China. Still, private equity has a lot of money sitting on the sidelines and some large national platforms are on the market. The fourth quarter could surprise us.”

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