Hospital deals led a busy pace of merger and acquisition activity in the second quarter of 1994, according to the latest report from Irving Levin Associates.
During the second quarter ended June 30, the New Canaan, Conn.-based financial services firm reported 125 healthcare merger and acquisition announcements, up from 123 in the first quarter of 1994.
The second-quarter activity included 21 hospital deals; 14 rehabilitation facilities; 14 long-term-care facilities; 12 physician groups; 11 home healthcare businesses; 11 laboratories, imaging centers or dialysis centers; 10 HMOs; and three psychiatric facilities. Some 29 deals fell into the "other" category.
The two largest hospital industry transactions were the $161 million proposed acquisition of Hallmark Healthcare Corp., Atlanta, by Community Health Systems, Houston, and the $145 million purchase of 413-bed Fountain Valley (Calif.) Regional Hospital by OrNda HealthCorp, Nashville, Tenn. The Community/Hallmark deal will create a 38-hospital chain, and is expected to be completed Oct. 5.
In the HMO sector, the largest deal was the $250 million purchase of CareFlorida Health Systems by Foundation Health Corp., Sacramento, Calif.
"The volume of total transactions has continued to rise with no sign of slowing down going into the third quarter," said Stephen Monroe, a partner at Irving Levin. "With the underlying uncertainty of where the healthcare industry is headed, many smaller companies are looking to consolidate in order to secure themselves for the future."
In addition, Irving Levin reported the following hospital purchase prices:
Decatur (Ga.) Hospital by DeKalb Regional Healthcare System, Decatur, for $6 million. The seller was OrNda.
Doctors Hospital, Montclair, Calif., and Ontario (Calif.) Hospital to Pacific Physician Services, Redlands, Calif., for $9.4 million. Pacific Physician Services has subsequently agreed to sell Ontario to Vencor, a Louisville, Ky.-based chain of intensive-care hospitals.
Edinburg (Texas) Hospital by Universal Health Services, King of Prussia, Pa., for $14 million.
Midlands Community Hospital, Papillion, Neb., by Quorum Health Group, Nashville, for $11 million.
Stuart Circle Hospital, Richmond, Va., by Bon Secours Health System, Marriottsville, Md., for $31.6 million.-