NEW CANAAN, CT – July 17, 2024 – Health care merger and acquisition activity slightly decreased in the second quarter of 2024, with 496 deals announced, according to new acquisition data from LevinPro HC. Activity in the Q2:24 was 2% lower than in the first quarter, when 506 transactions were announced. However, it is a drop of 18% compared with activity in the second quarter of 2023, when 604 deals were announced.
Activity in sectors such as Physician Medical Groups and Other Services drove much of the volume, with 124 and 135 deals, respectively. Demand for healthcare real estate, such as medical outpatient buildings and properties, has driven high deal volume in the Other Services for the past several years. Activity in the Behavioral Health Care and Home Health & Hospice sectors during Q2:24 have increased 12% and 50% over the previous quarter, respectively, thanks to tailwinds in each market. More and more patients are seeking alternatives to facility-based care, turning toward home health services, and demand for substance use disorder treatment services have driven investment in that area. Laboratories, MRI and Dialysis saw the largest decline, with 20 deals announced during the second quarter, a 48% decrease from the prior quarter.
The Hospital sector saw a slight increase, with 17 deal announcements in the second quarter of 2024, compared to 15 announced during Q1:24. The largest hospital deal of the quarter is the $886 million acquisition of five undisclosed Utah hospitals leased by an affiliate of CommonSpirit Health. The buyer is a new joint venture created by Medical Properties Trust and an investment fund affiliated with a leading multi-strategy, multi-billion dollar institutional asset manager with a proven track record in real estate investments.
The health technology markets all saw a decline in activity, dropping 11% from the first quarter of 2024, and 20% below the second quarter of 2023. The Biotechnology sector saw the largest quarter-over-quarter decline of 35%, falling to 31 deals.
Deal value in the second quarter totaled $47.3 billion, a decline of 12% compared with the approximately $53.9 billion spent in the first quarter, based on disclosed prices. The spending in Q2:24 was 20% lower than the $59.6 billion disclosed in the second quarter of 2023. The largest deal by price was Johnson & Johnson’s $13.1 billion purchase of Shockwave Medical, a cardiovascular medical device company changing how calcified cardiovascular disease is treated with intravascular lithotripsy. According to its most recent annual report, Shockwave Medical’s revenue for the FY 2023 was $730.2 million, an increase of $240.5 million, or 49%, compared to FY 2022. The company’s Adjusted EBITDA was $242.7 million for FY 2023, a 40% increase compared to adjusted EBITDA of $173.9 million for FY 2022.
“There are a lot of challenges in the healthcare M&A market right now, so the decline activity is no surprise,” said Dylan Sammut, Healthcare Editor at Irving Levin Associates, which publishes the data on its LevinPro HC platform. “But those pressures are also forcing agency owners to look for larger partners, whether it’s private equity platforms or health systems. There will still be plenty of activity in the lower- to middle-markets.”
All quarterly results are published in The Health Care M&A Report, which is part of the Irving Levin Associates and LevinPro investment research source. For information, or to order the reports, call 800-248-1668. Irving Levin Associates is celebrating more than 70 years of delivering exclusive M&A intelligence to its sophisticated audience of seniors housing and healthcare investors. The company was established in 1948 and has offices in New Canaan, Connecticut and North Bethesda, Maryland. The company publishes research reports and newsletters and maintains databases on the healthcare and senior housing M&A markets.
