Volume remained steady year-over-year in the behavioral health, managed care, and laboratory sectors. Hospital and health system transactions, meanwhile, dipped slightly, with only 20 transactions reported, compared with 24 in Q1 2019.

There were 61 transactions announced in the post-acute sector, and volume was down nearly 22 percent from Q1 2019, when 78 transactions were announced. HCIT volume nearly doubled year-over-year, with 55 transactions announced, versus 32 in Q1 2019.

It is important to note that some announced transactions do not go on to close due to unforeseen risks, regulations, or other factors. In a COVID-19 environment, the number of announced transactions that do not ultimately close could be higher than usual because of the economic impact of the pandemic on healthcare organizations.

Data points that stand out include the following:

• While HCIT and post-acute M&A volume started off strong in Q1, with 26 and 33 transactions announced in January, respectively, volume decreased sharply toward the end of the quarter, with only 15 and 13 transactions, respectively, announced in March.
   

• Hospital and health system M&A volume bucked this trend, with nine hospital and health system transactions announced in March, compared with nine in January and two in February. Volume in this sector is traditionally driven by strategic buyers.