Hospital M&A Activity Declines in Quarter 4 of 2024
Hospital mergers and acquisitions took a bit of a dive in the last quarter of 2024. The LevinPro HC platform noted a total of 15 transactions in the Hospital sector during Q4:24, down about 29% from the more energetic pace set in Q3:24 with 21 deals. This decline was also evident compared to Q4:23 when 18 Hospital transactions made headlines.
Dylan Sammut, Editor of Health Care at Irving Levin Associates, shared, “We’re not too shocked that deal-making has eased up a bit, given the challenging market climate all year long. Between factors like inflation, cyberattacks, labor issues, and more, health systems had plenty of reasons to hit the brakes on their merger and acquisition plans.”
Looking at the bigger picture, the annual deal volume for 2024 was also quieter, with 69 hospital transactions, slightly down from 76 in 2023. For those hungry for more details, the Health Care Services Acquisition Report prepared by the LevinPro HC team will shine a brighter light on the 2024 Hospital M&A market. Look out for that report hitting the shelves in February!
In the last quarter of 2024, much of the deal-making action revolved around major health systems divesting assets. For example, Community Health Systems waved goodbye to two Florida hospitals, ShorePoint Health Punta Gorda and ShorePoint Health Port Charlotte, fetching $265 million from AdventHealth. The detailed deal landscape also highlighted potential divestitures on Community Health Systems’ radar, first mentioned in their third quarter 2024 earnings call and further discussed in public appearances.
The ongoing Steward Health Care bankruptcy case also shaped the quarterly acquisitions scene. Insight Health System scooped up Trumbull Regional Medical Center in Warren, Ohio, for an undisclosed sum. On the other hand, Quorum Health Group snagged two of Steward’s hospitals in Texas, Scenic Mountain Medical Center, and Odessa Regional Medical Center. Meanwhile, HonorHealth expanded its footprint by purchasing three Steward hospitals in Arizona.
A diverse group of investors and strategic buyers hopped on the hospital acquisition train in the last quarter. Among the notable transactions were six involving short-term acute care hospitals, totaling 10 facilities, as well as deals for community hospitals, surgical hospitals, specialty hospitals, and even a micro-hospital. Health system mergers also featured on the bill, with Sanford Health and Marshfield Clinic Health System sealing their partnership. This deal sees Sanford injecting $500 million over five years to fund strategic upgrades at Marshfield. Another significant acquisition involved Summa Health, which was snapped up by Health Assurance Transformation LLC for $485 million. With a wider reach, Health Assurance Transformation LLC operates hospitals and health systems across the country, backed by private equity firm Ge.
