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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.

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.

By the Numbers

Health Services deal volume in Q2 2016 went up almost 8% from Q1 2016 and 16% on a year-over-year basis. There were 239 total deals with Long Term Care leading the way with 87 deals, followed by Other Services (51), Physician Medical Groups (27), Hospitals (22), Behavioral Health (17), Home Healthcare (12), Labs/Imaging (11), Rehab/PT (7), Managed Care (5).

Healthcare Services deal value in Q2 2016 went up 4% ($16.1B) compared to Q1 2016, however it was 39% lower when compared year-over-year. Physician Medical Groups contributed 42% of overall deal value ($6.7B), followed by Other Services 26% ($4.2B), Long Term Care 15% ($2.3B), Hospitals 12% ($1.9B), Home Healthcare 3% ($426M), Behavioral Care 1% ($240M), Managed Care 1% ($159M), Labs/Imaging <1 nbsp="" rehab="" span="">

Q2 2016 Average Enterprise Valuation multiples (EV/EBITDA) in Labs/Imaging had the highest Average Enterprise Valuation multiple (21.4x), followed by Home Health/Hospice (20.7), Ambulatory Care/Dental/Rehab (13.8), Outsourcing (13.8), Acute Care (10.4), SNF's/ALF's/LTACH's (9.1), while the Managed Care had the lowest (8.2x).

(Sources: Health Care M&A Information Source, S&P Capital IQ, PwC)

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