HOSPITAL AND HEALTH SYSTEM

SNAPSHOT

RECENT M&A ACTIVITY

Based on H2C research, the volume of hospital and health system transactions decreased from 134 announced transactions in 2017 to 76 announced transactions in 2018. 2017’s transaction total was bolstered by a significant number of rural and/or independent hospitals seeking partnerships with larger systems. Despite lower volume, 2018 featured a number of large systems being acquired or merging with other large systems. Notable transactions in 2018 included LifePoint Health merging with RCCH HealthCare Partners, HCA Healthcare’s acquisition of Mission Health, and the continued divestitures by Community Health System and Tenet Healthcare. The challenges faced by independent hospitals—particularly rural hospitals—continue to mount, as evidenced by the very active first quarter of 2019. Over half of the transactions announced in the first quarter of 2019 involved targets with less than $100 million in revenue. 

HOSPITAL AND HEALTH SYSTEM MARKET OVERVIEW

The hospital and health system sector in the United States is a $1.1 trillion market; the market is consolidating and adapting to new methods of care delivery. There are three categories of hospitals and health systems that control a majority of the market share: publicly traded systems, privately held systems, and not-for-profit systems. There is significant variance in the size, profitability, and organizational structure among these groups.

Figure 1: Number of Hospitals in Health System
Figure 2: Comparison of Hospital and Health System M&A

2019 Q1 ANNOUNCED TRANSACTIONS

Figure 3: Public Comparables • Health Systems
Figure 4: Hospital and Health System Index • Relative Stock Performance
Figure 5: Historical Valuations • TEV / EBITDA
Figure 6: Historical Valuations • TEV / Revenue

Source: CapIQ
(1) Last 12 Months ending Dec. 31, 2018.
Note: Historical stock performance as of April 4, 2019.

H2C TRANSACTIONS ADVISORY

OVERVIEW

A registered broker-dealer, H2C Securities is a preeminent investment bank and a leading healthcare services firm. H2C provides investment banking services to companies seeking additional capital, acquisitions/divestitures strategies and execution and/or restructuring/recapitalization solutions. 

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ABOUT HAMMOND HANLON CAMP LLC

Hammond Hanlon Camp LLC (“H2C”) is an independent, healthcare-focused strategic advisory and investment banking firm with a particular emphasis on the not-for-profit sector. The firm’s principals have been lead advisors on hundreds of transactions in the healthcare industry representing billions of dollars in value, offering the experience and industry knowledge to achieve the most favorable results. 

Michael B. Hammond

Principal

mhammond@h2c.com

212 257 4550

Victoria S. Poindexter

Principal

vpoindexter@h2c.com

312 508 4201

William B. Hanlon III

Principal

bhanlon@h2c.com

858 242 4801

C. Richard Bayman

Principal

rbayman@h2c.com

404 937 1340

MEDIA CONTACT

Kelly Duong

kduong@h2c.com

858 242 4810

+The Elements of Capital and Strategy

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HAMMOND HANLON CAMP LLC

Securities offered through H2C Securities Inc., member FINRA/SIPC