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.

Thursday, December 14, 2017

Hospice M&A Driven By Interest From Home Health

Home Health Players Line Up for Hospice Deals in 2018

(from Home Health Care News)

The strong role hospice plays in the post-acute care continuum is being realized more and more by consumers, driving a surge in mergers and acquisitions (M&A) activity and overall interest in the space by home health providers.

In fact, during Amedisys, Inc.’s (Nasdaq: AMED) third-quarter earnings call, CEO Paul Kusserow declared the company’s focus on larger hospice assets, based on significant growth in recent years.

Wednesday, November 8, 2017

5 Healthcare Verticals Among Top Industries For Return On Equity

These Types Of Businesses Have The Highest Returns

(from Forbes)

A friend recently described how his teenage son who mows lawns to earn cash around the neighborhood had decided against adding leaf raking to his services. The young man had figured out that mowing a lawn was a more straightforward and predictable way for a solo operation to generate a few bucks than is raking, gathering and disposing of leaves that may or may not still be falling as he raked.

Anyone investing in a business follows that same process. Evaluating the return or the reward for the effort, time or cash involved is important to determine whether you are making a “good” investment. As my friend’s son quickly understood, some tasks or industries generate better returns than others do.

Thursday, October 26, 2017

When It Comes To Selling Your Healthcare Practice You Have Options

MGMA17: Pros and cons of selling a practice to private equity

(from HealthExec)

Private investors are becoming increasingly active in healthcare acquisitions, which may maximize the purchase price when practices decide to sell, but there are downsides to these transactions compared to be absorbed into a hospital or health system.

Joseph Kahn, an attorney in the Raleigh, N.C. office of Hall Render, the largest healthcare law firm in the U.S., has a simple explanation in his presentation at the Medical Group Management Association (MGMA) conference in Anaheim, Calif. for why private equity acquisitions in healthcare have been on the rise: “that’s where the money is.”

Thursday, October 19, 2017

2017 Looking To Be The Gold Standard For Healthcare M&A

Hospital Merger and Acquisition Activity on Pace to Potentially Exceed 2016, According to Kaufman Hall Analysis

(from Kaufman Hall)

Hospital and health system partnership transactions for 2017 total 87 as of the end of the third quarter, setting a pace for transactions in 2017 that may exceed the 102 deals completed in 2016. Twenty-nine transactions were announced in the third quarter of 2017, slightly less than the 31 deals announced in the second quarter, according to the latest analysis by Kaufman Hall, a leading provider of strategic and financial consulting services, and enterprise performance management and decision support software.

Wednesday, September 27, 2017

Private Equity Still Frothy On Home Health Acquisitions

Despite Headwinds, Home Health Valuations Remain High

(from Home Health Care News)

The home health sector has faced a few hurdles since the beginning of 2017.

Publicly announced home health M&A activity proved lackluster in the first and second quarter of the year, as the industry continues to reel from regulation overload from the Centers for Medicare & Medicaid Services (CMS).

But despite these challenges, investors are still drawn to the industry, even as valuations for in-home care services providers have reached “all-time highs.”

Wednesday, August 9, 2017

Outpatient ASC M&A Fueled by Health Systems

As outpatient surgeries grow, hospitals look to claim piece of ASC market

(from Modern Healthcare)

With the looming financial threat from the migration of lucrative hip and knee replacement procedures to outpatient settings, some hospitals and health systems have acquired ambulatory surgery centers or formed joint ventures with surgeons in these centers.

That allows hospitals to keep a piece of the revenue.

And it better aligns their interests with surgeons, who like ambulatory centers because the greater efficiency of these facilities lets them do more procedures in a day and make more money, said Naya Kehayes, practice leader for ambulatory surgery at ECG Management Consultants.

Tuesday, July 25, 2017

Repeal & Replace Uncertainty Weighing Down Hospital Stocks

Hospital Operators Sink Amid Healthcare Confusion--But HCA Stays Ready for More Deals

(from TheStreet)

HCA Healthcare Inc. (HCA) sunk 3.62% to $82.96 per share in early afternoon trading Tuesday, July 25 after reporting lower than expected second quarter earnings.

Uncertainty surrounding congressional action on the Affordable Care Act have impacted hospitals along with the rest of the healthcare sector. Tenet Healthcare Corp. (THC) and Community Health Services Inc. (CHY) descended on Tuesday, July 25 alongside HCA, down 7.16% and 8.26% respectively.

HCA second quarter revenues increased by four percent to $10.733 billion and cash flow totaled $1.404 billion, but revenue still missed the $10.85 billion benchmark presupposed by analysts. HCA is now projecting its earnings per share to fall in the range of $7.00 to $7.30, which is lower from its prior forecast of $7.20 to $7.60.

Tuesday, June 27, 2017

The Big Picture - 2017 Healthcare M&A Report

Global Healthcare Private Equity and Corporate M&A Report 2017

(from Bain & Co.)

Turmoil creates opportunity, and in 2016, there was plenty of both.

Private equity investors contended with a world of uncertainty. Would the long-running global recovery gain strength, falter or muddle along? Would the UK vote to exit the EU? Who would win the US presidential election?

Amid all this volatility, investors latched onto healthcare as a safe haven—that is, an industry with proven resilience to economic turbulence. The growth of healthcare is powered by several immutable long-term trends: an aging global population, a rising incidence of chronic diseases, an expanding demand for quality services and an ongoing need to deliver those services more efficiently.

Wednesday, June 7, 2017

Q1 2017 Healthcare Services M&A Pulse - Volume, Value, Multiples

Healthcare Services Continues To See Elevated Activity  

While debate continues over the repeal and replacement of Obamacare, the US Health Services industry continues to be a hotbed of activity as Q1 2017 deal volume ticked up by 0.9% and 2.6% over prior year and prior quarter. Deal value however saw a sharp decline primarily as reporting for this sector was not as forthcoming with $7.9 billion disclosed, resulting in a decline of 49.3% and 58.2% over prior year and prior quarter. The shift towards value based reimbursements continues to have an effect on health systems M&A activity as they look to exercise more control over referral streams and ancillary services. This was evidenced by the 48 transactions among Physician Groups which experienced the greatest deal volume growth of 109% and 78% over prior year and prior quarter.

Thursday, May 4, 2017

Healthcare Deals Report: Looking Forward

VMG’s Health Care Transactions and M&A Report: 2016 Trends and 2017 Expectations

(from VMG Health

Health care M&A activity continued its half-decade long growth trend in 2016. Though the dollar value of total deals decreased relative to 2015 due to a spike in managed care megadeals in 2015, when excluding 2015, the dollar value of deals has continued to increase annually since 2012. The increase in both volume and value of health care M&A activity is driven by changing technology, an aging population, an increase in the number of insured people through the Patient Protection and Affordable Care Act (ACA), and the implementation of valuebased payments and alternative payment models. Taken together, these factors have driven providers to consolidate in an effort to take advantage of the economies of scale necessary to meet the goals of the “triple aim,” namely, increase service offerings and access to care, decrease cost, and improve the quality of care.

Wednesday, March 15, 2017

Hospital Acquisition Of Physician Practices: Things To Look Out For

3 hidden costs hospitals should consider when acquiring physician practices

(from Becker's Hospital) 

Consolidation has been increasing across the healthcare industry, and it's not just hospitals acquiring other hospitals. Hospitals are also increasingly acquiring physician practices.
A recent study by Avalere Health revealed hospital ownership of physician practices jumped 86 percent between 2012 and 2015. The study also found 38 percent of physicians were employed by hospitals in July 2015.
With this trend comes a myriad of challenges for hospitals and physicians, according to Heather Delgado, a partner and member of the healthcare department at the law firm of Barnes & Thornburg.

Monday, February 20, 2017

Q4 2016 Healthcare Services M&A Pulse - Volume, Value, Multiples

2016 Ends Strong Despite Lower Volume & Values

M&A activity in US Healthcare Services remained strong in 2016 when compared to other industries, despite seeing lower year over year deal values and volume. 

Overall deal volume in 2016 was slightly lower (1.4%) then in 2015, while deal value was significantly lower (59.6%) primarily as a result of several large 2015 Managed Care deals. 2016 Q4 was basically flat vs. Q3 with little movement both up and down on deal volume (1.3%) and deal value (-8.7%). 

The Affordable Care Act (ACA) continues to have a significant influence in Healthcare Services M&A driving both vertical and horizontal integration, as the shift from traditional fee-for-service reimbursements moves towards value-based payment models, spurring consolidation and resulting in larger but fewer players in the industry. 

However, despite the new administrations promise to repeal and replace the ACA the shift towards value-based care is not intrinsically tied to it, thus Healthcare Services transaction activity should remain strong in 2017 as payers and providers look to provide care at a lower cost with better outcomes.

Thursday, January 26, 2017

2016 Big 5 Healthcare Services Transactions

The 5 biggest health services M&A deals of 2016

The number of healthcare services deals only decreased slightly in 2016, but the overall value of healthcare transactions last year was significantly lower than in 2015. However, there were still many transactions exceeding $1 billion, according to a recent PwC report. 
There were 939 healthcare services transactions in 2016, down from 952 deals in 2015. In both years, long-term care had higher deal volume than any other subsector. 

The healthcare services transactions reported in 2016 had a total value of $71.7 billion. That's down significantly from 2015's total deal value of $177.5 million. The decline in total transaction value is largely attributable to fewer megadeals — transactions exceeding $1 billion — in 2016. There were 14 megadeals in 2016 compared to 18 the year prior.