But for companies that weren't so lucky, the response was to ramp up their cost-cutting efforts and turn to acquisitions to gain scale or diversify. And with debt expected to remain cheap, there's every reason to think that strategy will continue in 2014.
“I think the robust debt market will continue to drive mergers and acquisitions,” said James Goody, vice president and portfolio manager at Associated Bank. “It's really an opportunistic time to take advantage of low interest rates.”
Jonathan Morphett, managing director at investment bank Avondale Partners, also expects the public and private equity markets to remain open to healthcare companies. That could mean more financial buyers rolling up companies in lucrative markets including behavioral health and revenue-cycle management. It also could mean more initial public offerings such as Envision Healthcare Holdings' $966 million listing on the New York Stock Exchange.
Envision's three business units include ambulance services, physician staffing and population health offerings—all of which are expected to benefit under healthcare reform. Other notable IPOs in 2013 included Premier's debut in September and Surgical Care Affiliates' listing the following month. All three IPOs have performed strong out of the gate.
“My sense is that will continue to be robust in 2014,” Morphett said.
Private equity firms are “hungry for investments,” both for platform deals that bring them into a new sector and deals that round out their existing portfolio, Knapp said.
Follow Beth Kutscher on Twitter: @MHbkutscher