Healthcare mergers to keep pace in 2005

Healthcare services mergers and acquisitions in 2005 are expected to be on par with 2004, which was bolstered by the rise in hospital deals, according to a new report from Irving Levin Associates, New Canaan, Conn. The services segment announced a total of 420 mergers and acquisitions in 2004 worth an announced value of $39.1 billion, values that are similar to 2003's overall numbers. The 11th edition of the firm's "Health Care Acquisition Report" said hospitals rebounded sharply from 2003, when dealmaking activity sank to its lowest level in 15 years; in the hospital sector, there were 58 announced deals (up from 37 in 2003) at an announced value of $9.5 billion (up from $2.3 billion in 2003). Levin noted that many of the deals were part of the 27-hospital divestiture program by Dallas-based Tenet Healthcare Corp. -- 22 of the hospitals have been sold so far -- and that the dollar value was swelled by private equity deals involving Iasis Healthcare, Franklin, Tenn.; U.S. Oncology, Houston; and Vanguard Health Systems, Nashville. Managed-care and behavioral-health transactions also were up, the firm said. -- by Vince Galloro