Hospital M&A activity held steady with 21 transactions in both the second and third quarters of 2019, according to new acquisition data from HealthCareMandA.com. The most recent quarter was down 20% compared with the same period in 2018, when 25 deals were announced. Dollar volume was up sharply compared with the second quarter, totaling nearly $5.0 billion, a 291% increase. Year over year, Q3:19 spending was down 41% versus the $8.4 billion reported in the same quarter in 2018, based on disclosed prices.
Medical Properties Trust, a healthcare real estate investment trust, was the most active acquirer in this sector, with four deals. The REIT paid more than $1.5 billion to acquire the real estate assets of 14 acute care hospitals and two behavioral health hospitals owned by Prospect Medical Holdings in California. The company also acquired seven newly constructed community hospitals operated by Saint Luke’s Health System around Kansas City, Missouri for $145 million. Private equity firm TPG Capital was busy in Southeast Asia. It sold Hong Kong-based United Family Healthcare (nine hospitals and 14 ambulatory clinics in China) to New Frontier Corporation for $1.3 billion, then teamed up with Malaysia’s Hong Leong Group to acquire 17 hospitals across Malaysia, Indonesia and Vietnam for $1.2 billion from Columbia Asia Group.
“The third quarter activity was notable for the number of REIT deals by Medical Properties Trust, but also for the number of smaller not-for-profits joining larger regional systems,” stated Lisa E. Phillips, editor of the Health Care M&A Report, which publishes the data. “All across the country, the standalone community hospitals are finding it financially difficult to stay independent.”
All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com investment research source. For more information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters and maintains databases on the health care and senior housing M&A markets.