Welcome to HealthcareBanker.com

Thank you for visiting HealthcareBanker.com a news aggregator of middle-market mergers and acquisition activity in the healthcare industries. This site addresses investment banking topics dealing with M&A, Capital Raising, Borrowing/Lending and other Corporate Development and Finance activities within the Healthcare Services, Healthcare IT, Medical Device, and Life Science industries.

Friday, December 9, 2016

Hospital M&A Lowering Prices, But Not For All

Value-Based Care, Price Transparency Drive Hospital Mergers

(from RevCycle Inteligence)
A HFMA report stated that value-based care and price transparency will add value to hospital mergers, including lower prices for consumers.

Healthcare system and hospital mergers will likely increase as new value-based care models emerge, according to a recent Healthcare Financial Management Association (HFMA) report. But the rise in value-based reimbursement and price transparency will improve value of the mergers to consumers.

Some healthcare system and hospital mergers have increased prices for consumers because the merged organizations have greater market share. However, the HFMA report indicated that risk-based reimbursement contracts and healthcare consumerism will incentivize merged entities to lower prices.

Thursday, November 10, 2016

Q3 2016 Healthcare Services M&A Pulse - Volume, Value, Multiples

Volume Down, Values Up

Based on available data, Q3 2016 M&A activity in the US healthcare services industry saw a decline in deal volume and an increase in deal values when compared to Q2 2016. Overall YTD M&A activity in this sector remains frothy and on-par with the record breaking numbers that were seen in 2015. However, with the US presidential elections in the rearview mirror and president elect Trump promising as part of his campaign platform to repeal and replace “Obamacare”, the healthcare services industry could be headed into rough waters that could dampen activity as we look to close out Q4 2016 and into 2017.

Friday, October 7, 2016

Healthcare M&A Expecting Uptick in Q4

Health-Care Transactions Update: August 

(from BNA) 

Sept. 21— Health-care transactions activity is expected to pick up in the fourth quarter following a bit of a slow down over the summer months, attorneys who advise clients on deals told Bloomberg BNA.

It wasn't a surprise that the summer months had a lower volume of closed deals, as shown in the August list, Gary W. Herschman, of Epstein Becker Green in Newark, N.J., said. Those months traditionally are slower, Paul A. Gomez, of Epstein Becker Green in Los Angeles said.

Both advisers expect transactional activity to be more robust in October, November and December, because of a large number of deals that are in the “pipeline” and targeted to close before year-end.

Monday, September 12, 2016

Healthcare M&A Showing Positive Outlook

Dealmakers' Forecast for Healthcare M&A Brightens 

The outlook for M&A in the healthcare sector was much more positive in August than it was earlier in the year, according to our monthly survey
(from M&A News)
The outlook for M&A in the healthcare sector was much more positive in August than it was earlier in the year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP), a forward-looking sentiment indicator, published in partnership with CT.

In August, the sector garnered a 3-month outlook score of 71.0 and a 12-month outlook score of 72.1, much higher than the scores of 53.2 and 59.8 the sector received in March, when we last featured it. Interestingly, there was not a wide disparity between the 3-month and 12-month outlooks in healthcare as there was in some other sectors, most notably energy, in which the long-term outlook was much more positive than the short-term outlook.

Tuesday, September 6, 2016

Follow The Money: 3 Healthcare Verticals Attracting Private Investors

3 healthcare sectors that are grabbing the eye of private equity investors

(from MedCity News)

The healthcare and life sciences industries continue to spur thousands of new investment opportunities each year – especially on the heels of the Affordable Care Act. This fast-paced environment and significant upside potential can be quite intriguing. While different investors will favor certain sectors over others, at NewSpring Capital, we continue to see promising opportunity in behavioral health, home health, and big pharma outsourcing.

Tuesday, August 9, 2016

Q2 2016 Healthcare Services M&A Pulse - Volume, Value, Multiples

2016 On Pace with Record 2015

As a result of the passage of the Affordable Care Act and its various mandates, the healthcare services industry has seen a boom in mergers and acquisitions as evidenced by deal volume and value that hit an all time high in 2015. Healthcare M&A activity has remained active in the first half of 2016 driven by the relatively inexpensive cost of capital, continued movements towards population health management and value-based reimbursements, consolidation in geographic markets and inbound investments from other countries.

Thursday, July 21, 2016

What is the Driving Force Behind Record Healthcare M&A

Merger and acquisition trend in healthcare fueled by physician practices, Cascade says

There have been nearly 400 transactions in the physician practice management subsector over the past five years alone, Cascade says. 

Merger and acquisition activity in the healthcare industry is booming thanks to high valuations, a strong return on investment and opportunities to consolidate, and according to new research by Cascade Partners, this is increasingly true within physician practice management. 

Over the last 10 years, a large amount of the physician practice-centered M&A activity was focused on a relatively small number of specialities like emergency physicians, hospitalists and anesthesia, which helped to build large, publically traded companies, Cascade found. More recently, though, interest has spread across a broader spectrum of specialities, including ophthalmology, urgent care, primary care and dermatology, to name a few.

Tuesday, June 14, 2016

Is Healthcare M&A Good For Consumers?


Combining forces: Will healthcare mergers hurt patients?

Consolidation has become commonplace, but some experts worry it will increase prices without improving patient care. 

(from Lebanon Daily News) 

Annville Family Medicine founding partner Robert Nielsen had a passion for treating ill patients, but by 2014, it was the doctor who was sick.

He was sick of always thinking about ever-increasing government regulations, keeping up with paperwork, negotiating with insurance companies – everything that kept his focus away from the people who needed to get well.

Nielsen found relief when the independent practice he helped to form in 1978 – doctor’s visits cost $12 then – was purchased by Harrisburg-based PinnacleHealth in a merger that took effect on Jan. 1, 2015. He’s happier now, still performing some administrative roles as medical director of PinnacleHealth Medical Group but spending half of his time with patients. 

Speaking of patients, it was thinking about current and future generations that need access to care that convinced him Annville Family Medicine had made the right decision to join Pinnacle, he said.

“Once you get (yourself) out of the picture and look at it from that perspective, there was no regret,” he said.

Tuesday, May 31, 2016

Health Systems Reactive To Mergers & Acquisitions

The Impact of the Health Care Consolidation Trend
(from H&HN Mag

Some megadeals in the medical device and drug industries — totaling $170 billion — hold significant implications for hospitals and health systems.

In the last 30 days, medical device and drug megadeals involving more than $170 billion have dominated headlines:

  • Zimmer Holdings (the second largest orthopedic device manufacturer) agreed to acquire Biomet (No. 4 in orthopedic devices) for $13.35 billion — the biggest device deal since the 2012 Johnson & Johnson acquisition of Synthis for $21.2 billion.
  • Novartis and Glaxo Smith Kline announced a $20 billion deal to swap assets strengthening the core businesses in each organization.
  • Valeant’s $45 billion hostile bid to acquire Allergan and its Botox franchise, financed in part with Pershing Capital, continued to get attention.
  • Pfizer announced a $99 billion deal to acquire Astra Zeneca.
The health care industry is accustomed to deals. In our communities, consolidation of physicians with hospitals is standard fare. Hospitals are integrating with long-term care providers and merging with peers to achieve scale in regional systems.

Thursday, May 19, 2016

Healthcare IT M&A Aligning With Policy Trends, Activity Easing

Looking at the M&A Dance in Healthcare IT: How Will 2016 End Up, Trend-Wise?

The M&A activity of 2015 reflected some of the fundamental realities of U.S. healthcare’s broader trajectory

It was excellent to speak this week with Michelle Mattson-Hamilton and Ben Rooks of ST Advisors, a strategic and financial advisory firm focused on the healthcare IT industry. Ben and Michelle have been part of our team preparing the Healthcare Informatics 100 compendium for several years now, and, along with our colleagues at Porter Research, have been instrumental in helping us, the editors of Healthcare Informatics, bring the best list possible to our readers.

Together, Ben and Michelle have decades of experience with business mergers and acquisitions; and their focus on the healthcare IT industry in their analysis published this week offered numerous important insights.
Among the key points they made in their well-written analysis article:

Thursday, May 12, 2016

Two Things Healthcare CEO's Must Consider Prior To A Merger Or Acquisition

So many M&A deals collapse because leaders neglect this simple strategy

(from Becker's HR)

An analysis of 2,500 acquisitions by LEK Consulting shows more than 60 percent of them destroy shareholder value. Yet many corporate leaders continue to feel compelled to pursue growth through mergers and acquisitions, reasoning that failing to increase scale poses equally dangerous risks.
"Perhaps such deals should come with an official warning: 'Acquisitions can result in serious damage to your corporate health, up to and including death,'" Alan Lewis and Dan McKone, managing directors and partners at LEK Consulting, wrote in a recent article published by the Harvard Business Review.

According to their research, the problem lies not in the high volume of M&A deals, but that oftentimes executives don't pay enough attention to the evaluation process that serves as a foundation for these deals. As a result, they often "get deals wrong."

Monday, May 9, 2016

M&A Helps Health Systems Diversify Revenue Streams

Hospital Mergers, Acquisitions Bring Revenue Opportunities

(from RevCycle Intelligence

Hospital mergers and acquisitions have become a promising way for healthcare organizations to achieve scale and bolster their revenue cycles.

Hospital mergers and acquisitions have been on the rise ever since the Affordable Care Act started to change the way the healthcare system generates its revenue. Throughout 2013, many major health systems consolidated to create multi-hospital networks, a previous report noted. In 2014, there were 95 hospital mergers and acquisitions, which set a record for the industry.

The hospital takeover trend does not appear to be going away. Recently, a number of hospitals either officially merged or planned to merge. Here is a rundown of the most recent merger and acquisition announcements across the industry.

Friday, April 15, 2016

Avoiding the Man: Smaller Healthcare Providers Growing Through Bolt-On Acquisitions Unnoticed

Small, Piecemeal Mergers in Health Care Fly Under Regulators’ Radars

(from NY Times) 

Federal officials are expected to argue in court starting Monday that a large hospital merger in the Chicago area could hurt consumers and should be stopped. It would be the latest in a series of efforts by regulators to push back against a wave of consolidation among major health care providers.

But a frenzy of smaller transactions is also profoundly changing the landscape, many of which face little regulatory resistance.

The deals are often for a couple of doctors here, or a hospital there, making them too small to attract much attention. But as those deals add up, they are creating groups that in some cases dominate local or regional markets. And they are raising questions about whether the gaze of antitrust officials is directed in the right place.

Monday, April 11, 2016

Now That ACA Is Here To Stay Will Healthcare M&A Slow Down

Health Care Deals Thrive, but Dealmakers Predict Significant Slowdown in Future Activity

(from M&A news)

Expectations for M&A in the health care industry have plummeted over the last year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP). Dealmakers polled in March gave the sector a 3-month composite score of 53.2 and a slightly higher 12-month composite score of 59.8. (See related chart).

A year ago, they gave health care a 3-month score of 91.2, the highest ranking ever received on the MMP for any sector. As recently as August, transaction pros gave health care a 3-month score of 78.1. In recent years, consolidation in the sector has been driven by the Affordable Care Act, as providers have been under pressure to achieve cost efficiencies. Over time, the impact of ACA is expected to lessen. Some poll respondents expressed uncertainty about the future of the ACA, due to the upcoming presidential election.

Wednesday, March 30, 2016

5 Questions Business Sellers Should Ask Themselves Before Completing A Transaction

Avoiding Seller’s Remorse in M&A

(from InvestmentBank)

Seller’s remorse at some point in the business sale process is extremely common. Because many business owners often spend their lives building up their companies, but sell them only once, anxiety abounds as a transaction close nears. Virtually no entrepreneurs will know emphatically that they have made the right decision until the business sales process is over and the deal is done. Because seller’s remorse can represent a huge emotional barrier, it is helpful to be preemptive in problem solving. Below are some clear questions and potential solutions which will help to alleviate many of the big issues inherent in traversing seller’s remorse when selling your business.

Am I leaving money on the table?

Selling entrepreneurs always want to maximize their liquidity event. Juxtapose this with the acquirer’s desire to nab the business and its assets for as little as possible and you have a legitimate fear on your hands. There are a few ways to help ensure this fear remains unrealized:

Wednesday, March 9, 2016

Acquisitions of Smaller Healthcare Providers Continues

Health-Care Mergers Up Over Last Year, Board Advisers Say


(from BNA)
March 3 — The volume of mergers and acquisitions in the health-care industry is up compared with 2015, which was a very strong year for transactions, according to industry insiders. 

Consolidations among health-care providers are up 66 percent over this point last year, and “overall everyone else in health care is gaining in scale,” Mike Condron, a managing director in the Chicago office of Newport Board Group which advises directors of health-care companies, said March 3 during a webcast sponsored by ECG Management Consultants.

According to data from Bloomberg Law: Corporate Transaction's Deal Analytics, the largest U.S. deals in the sector announced so far this month are Hong Kong-based Samsonite International SA's planned purchase of Tumi Holdings Inc. of New Jersey for $1.36 billion, and California-based McKesson Corp.'s pending acquisition of Rexall Drug Stores Ltd. for $2.23 billion.

Thursday, February 11, 2016

Six Tips To Consider When You Recieve An Unexpected Bid For Your Practice

What Should A Healthcare Company Do With An Unsolicited Acquisition Offer?


(excerpt from David Chase article in Forbes)

Questions to ask yourself

1. Understand the market dynamics and what it means for your choices: 
  • Is there evidence the market is consolidating? 
  • Is the offer a viable alternative to raising equity capital?
  • Do I understand how those economics work and what the structure would look like in either transaction in addition to the price? There is a lot of potential complexity in deal terms, whether it’s with a VC or a potential acquirer.
2. Are there other buyers out there I should talk to? How do I make sure my company is included in other conversations where buyers are considering getting into the space? Naturally, having competition makes a big difference in the ultimate outcome. It also has a way of encouraging the potential buyers to “behave.” That is, avoid putting onerous terms in the deal or they will drag you through a protracted process.

Monday, February 8, 2016

Healthcare to Lead M&A in 2016

Six Industries Primed for M&A Activity in 2016

(from IBISWorld Healthcare Sector)

The healthcare sector is one of the most active regarding M&A activity in the United States. In the first half of 2015, the sector represented 25.2% of the total value of announced deals; this was enough to make it the largest segment at the time. Industries in the healthcare sector have traditionally remained fragmented and separate from one another. However, in the midst of profound regulatory changes, mainly driven by the implementation of the Patient Protection and Affordable Care Act (PPACA), sector operators are scrambling to adjust. In the five years to 2016, deferral funding for Medicare and Medicaid has grown at an anticipated average annual rate of 4.3%.

Friday, January 22, 2016

2016 Healthcare CXO's M&A Outlook

Healthcare executives expect M&A to drive growth in 2016

(from Becker's Hospital CFO)

Healthcare executives are optimistic about their organizations' financial performance in the year ahead, according to recent survey by Capital One.

More than 250 senior healthcare executives responded to the survey, which asked about their outlooks for their individual organizations and the industry as a whole for 2016. The survey was conducted shortly before the J.P. Morgan 34th Annual Healthcare Conference, which is being held Jan. 11-14 in San Francisco.

Here are six findings from the survey.

Tuesday, January 12, 2016

2015 Medical Device M&A Year End Review

Some stats on medical device and diagnostics investment/M&A patterns from 2015: Ups and downs

(from MedCity News)

In general, venture capital went up quite a bit in 2015 reaching $59 billion, more than doubling in the last five years – but according to the latest Silicon Valley Bank report, only $2.4 billion went into medical devices.

Based on the report, interest in investment in the medical device and diagnostics sector does seem to be going up, though. Companies with just a CE mark or even no regulatory approval at all are still getting acquired more than what’s considered average – which should provide hope for those in early stage.