The number of healthcare mergers and acquisitions in the second quarter eased up only slightly from the previous quarter's record pace, according to figures from Irving Levin Associates, a New Canaan, Conn.-based financial services firm.
In the second quarter ended June 30, 209 transactions were announced, down 5.4% from the previous quarter's record of 221 deals, according to Levin's Health Care Merger & Acquisition Report.
"The healthcare merger and acquisition market remains robust," said Stephen Monroe, a Levin partner. The transactions were at the second-highest level since the firm began tracking them three years ago, he noted.
Hospitals continued to lead the pack with the most deals-43-in the quarter. That's up 2.3% from the previous quarter.
Home healthcare companies, the second-largest of the healthcare service niches in Levin's report, showed a blast of activity with 40 deals. The number of deals climbed 42.8% from the previous quarter.
Other activity and the percentage increases: 36 medical group deals, down 10%; 18 long-term-care deals, down 43.7%; 18 laboratory/MRI/dialysis deals, up 5.8%; 14 HMO deals, no change; 11 rehabilitation deals, down 42.1%; six psychiatric deals, up 50%; and 23 other deals, down 8%.
The biggest hospital transaction was the $1.4 billion buyout of Community Health Systems by Forstmann Little & Co., a New York investment firm. As a result of that transaction, the 41-hospital chain became a privately owned firm.
Columbia/HCA Healthcare Corp. announced three deals in which some terms were available. The Nashville, Tenn.-based giant will purchase half the assets of Riverside (Calif.) Community Hospital from a not-for-profit local organization, Community Health Corp. Although terms weren't disclosed, officials said the proceeds would repay the hospital's $60 million in debt.
In addition, the company agreed to buy Cape Fear Memorial Hospital, Wilmington, N.C., for $55 million and Saint Luke's Medical Center, Cleveland. Although a price for Saint Luke's wasn't disclosed, officials said proceeds of $80 million to $90 million will go into a not-for-profit foundation.
Other deals in which prices were disclosed:
Community Hospitals Indianapolis agreed to acquire Community Hospital of Anderson (Ind.) and Madison County for $53 million.
Community Health Systems agreed to acquire Marion (Ill.) Memorial Hospital and build a $50 million replacement facility.
Universal Health Services, King of Prussia, Pa., agreed to buy four psychiatric hospitals from First Hospital Corp., Norfolk, Va., for $33.5 million.
SSM Health Care System, St. Louis, agreed to buy Cardinal Glennon Children's Hospital, St. Louis, for $25 million.
Champion Healthcare Corp., an investor-owned chain based in Houston, agreed to buy Itasca Medical Center, Grand Rapids, Mich., for $21.5 million.
Olympus Healthcare Group, Westborough, Mass., agreed to buy Springfield (Mass.) Municipal Hospital for $9.5 million.
Georgia Baptist Health Care, Atlanta, agreed to buy Worth County Hospital, Sylvester, Ga., for $4.8 million.
Camcare, a not-for-profit system based in Charleston, W.Va., agreed to buy Braxton County Memorial Hospital, Gassaway, W.Va., for $2.4 million.