Several large hospital mergers and acquisitions announced in the fourth quarter of 1995 capped a year in which hospital deal volume rose 44%, according to Irving Levin and Associates.
The New Canaan, Conn.-based firm's Health Care Merger & Acquisition Report, released this week, documents 1995's frenetic pace of industry mergers and acquisitions.
The report showed 623 healthcare deals announced in 1995, up 20.3% from the previous year. The highest volume of transactions was in the hospital sector.
In 1995, the number of hospital deals announced was 144, up 44% from the previous year. The next busiest sector was physician groups, which jumped 58.5% to 103 announced deals.
In other sectors, rehabilitation centers announced 68 deals, up 36% from the previous year; home healthcare, 63 deals, up 14.5%; long-term-care facilities, 62 deals, up 40.9%; laboratories/imaging/dialysis centers, 52 deals, up 6.1%; psychiatric hospitals, 46 deals, up 70.4%; HMOs, 32 deals, down 23.8%; and other healthcare centers, 53 deals, down 38.4%.
In the fourth quarter, hospital deals were up, although merger and acquisition activity in the overall healthcare industry declined, Irving Levin reported. The firm reported 166 healthcare transactions for the quarter, down 10% compared with the previous quarter.
Hospitals announced 45 deals, up 4.6%, and physician groups announced 37 deals, up 8.8%.
Although the percentage increase for hospital deals was fairly small, the transactions that were announced were huge. They included the proposed merger of two Denver-based tax-exempt systems into the state's largest healthcare provider. Sisters of Charity Health Services Colorado and PorterCare Adventist Health System plan to merge into a system with $964 million in assets and $1.3 billion in annual revenues (Dec. 18/25, 1995, p. 28).
Another jumbo deal was Sharp HealthCare's agreement to enter into a joint venture with Columbia/HCA Healthcare Corp., Nashville, Tenn. (Dec. 11, 1995, p. 6). Terms have not been disclosed, but the deal is estimated to be worth more than $300 million.
In the fourth quarter, the home healthcare sector announced 16 deals, down 30.4% from the previous quarter; long-term-care facilities, 15 deals, down 6.3%; laboratories/imaging/dialysis centers, 13 deals, no change; rehabilitation centers, 12 deals, down 20%; psychiatric facilities, 12 deals, down 33.3%; HMOs, eight deals, no change; and other healthcare centers, eight deals, down 20%.