- According to a new report from Irving Levin Associates, healthcare merger and acquisition spending leapt up 152% from Q2 2013 to Q2 2014—$135.2 billion this year, up from $53.6 billion in Q2 last year.
- The spike is not exactly a surprise: There was a 171% increase between Q1 2013 and Q1 this year (to $49.9 billion this year).
- The bulk of the spending came from tech transactions, with deal volume increasing 20% from Q2 last year, and 13% from Q1 of this year.
Healthcare M&A in general was up, but hospital deal volume was down significantly. There were 22 deals done in Q2 last year; this year, only nine were completed. That's a 59% decrease. Things are also looking slim compared to Q1: There was 31% decrease in Q2 from 13 deals done in the first quarter. That drop is probably more expected—the quiet summer months are not necessarily known for big bang transactions.
Still, the pace of M&A seems to be slowing down. According to research from the same firm, deal volume fell 21% year-over-year last year, and the trend seems to be continuing this year. According to PwC, deal volume from Q1 2013 to Q1 of this year dropped 43%.
But while volumes drop, deal value is on the rise. Per the same PwC insights report, total health services deal value rose 152% during Q1 of this year. Hospital deal value increased from $320 million during Q1 2013 to $388 million during the first quarter of this year. The M&A market isn't necessarily slowing down; it's just getting more complex.
Want to read more? You might be interested in this story on 6 types of M&A structures hospital execs need to know.