H2C Industry Insights • 2017 Healthcare M&A Transactions Database
Hammond Hanlon Camp LLC Announces the Release of the 2017 Healthcare M&A Transactions Database
posted on January 30, 2018
CHICAGO – Hammond Hanlon Camp LLC (“H2C”), a healthcare-focused, independent strategic advisory and investment banking firm, announces the release of its 2017 Healthcare M&A Transactions Database to the public. The database is a wide-ranging compilation of transaction activity that shows the depth of merger and acquisition activity in Healthcare. Included in the database are details on over 600 transactions from 2017, including transactions with Hospitals and Health Systems, Healthcare IT, Long Term Care, Home Health, Behavioral, Ambulatory Surgery Centers and Laboratories. H2C will be updating the database quarterly and its professionals are always available to provide insight regarding any transaction listed.
2017 M&A Review
The quest to achieve scale continued in 2017. In an environment increasingly focused on reducing the cost of care, health systems appear to have determined that mergers and acquisitions provide the most expeditious route to revenue growth and cost reduction. Smaller, independent hospitals found it increasingly difficult to cut costs sufficiently and to access the capital required to invest in and maintain services, and determined that some loss of control to a partner was the best path to maintaining services in their communities. However, transactions completed and announced in late 2017 reflect that it is not only smaller providers that view partnership strategies as the preferred path forward. Victoria Poindexter, Principal at H2C, reflected “The merger of the two largest health systems in their states – Advocate Health in Illinois and Aurora Health in Wisconsin – reflects the expectation that, even at their size, consolidation and greater scale will afford both clinical and financial benefits. The signing of a definitive agreement between Catholic Health Initiatives and Dignity Health, creating the largest health system in the country with over $28 billion in revenues, along with the announced discussions between Ascension Health and Providence Health Services, with consolidated revenues of just under $45 million, indicates the tremendous pressure on providers to become more efficient in order to maintain their healthcare missions." Email Victoria
M&A is also the tool helping to drive the evolution of healthcare delivery. In 2017, the lines of care delivery became increasingly blurred through unique transactions that brought new entrants into adjacent territory. Rich Bayman, Principal at H2C, observed “There were a number of bold transactions, including CVS/Aetna and Optum/SCA, that could be early indicators in an evolving delivery system. Payors are increasingly interested in following the healthcare dollar, and are making larger bets on the provider space. Meanwhile, traditional health systems continue to focus on their core business and invest heavily in the outpatient arena.”
Health Systems weren’t the only lively sectors. Non-hospital transaction activity came from a range of investors, including providers, private equity and payors. “In a value based environment, subject matter are in demand. If someone can operate more efficiently, it is worth exploring partnership opportunities with them,” Bayman continued. Email Rich
2018 appears poised for robust transaction volume. For the last few years, many Providers have maintained margins through elevated government reimbursement, but that reimbursement stream appears to be eroding. “In recent years, increased government reimbursement allowed a deferral of necessary operational improvements. Those operational improvements are needed more than ever. Reducing cost and variation, along with increasing quality, continue to be the requirements for sustainability. For those that haven’t found a way to achieve those requirements on their own, a partnership may be the path forward,” said Bill Hanlon, Principal at H2C. Email Bill
If your institution is considering evaluating options and opportunities, H2C is uniquely positioned to offer guidance. Let us put our market knowledge and expertise to work for your institution. Contact a Banker directly or send an email to firstname.lastname@example.org.
About Hammond Hanlon Camp LLC
Hammond Hanlon Camp LLC (“H2C”) is an independent strategic advisory and investment banking firm committed to providing superior advice as a trusted advisor to healthcare organizations and related companies throughout the United States. H2C’s professionals have a long track record of success in healthcare mergers & acquisitions, capital markets, real estate and restructuring transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value. Hammond Hanlon Camp LLC offers securities through its wholly-owned subsidiary H2C Securities Inc., member FINRA/SIPC. For more information, go to h2c.com.
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