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posted on Oct. 10, 2018


CHICAGO — Three quarters of the way through 2018, healthcare merger and acquisition (M&A) transaction volume is down on a year-over-year basis, but still very active overall.


The pace of hospital and health system transactions has slowed this year, with the most significant slowdown occurring in the second quarter. To date, there have been 14 fewer hospital transactions announced than during the same period last year, despite the first quarter of 2018 keeping pace with 2017 activity. “Lower activity in the second and third quarter is being driven by a combination of factors, but we hear consistent themes: lack of available opportunities and a stable economy,” said Mike Tierney, Vice President, H2C.


Acquirers often desire scale, and many larger hospital transactions have taken place in the past few years, reducing available inventory. Today, there are 1,609 independent hospitals remaining in the United States, down from 1,899 in 2012, a decline of 290, or 15 percent in a little over five years. Of those, the number of independent hospitals with more than 200 beds declined by 107, or 26 percent during that period.


Recent investment gains may have provided some health system boards with a false sense of confidence in the sustainability of their financial performance, as these gains have occurred against a backdrop of flattening hospital margins and other rising headwinds. This false confidence may result in delaying the necessary exploration of strategic alternatives. “Health systems, like most businesses, have the greatest value and bargaining power when they’re thriving,” said Bill Hanlon, Principal, H2C. “While a change of control is certainly not the only answer, we are increasingly seeing health system boards and management teams take a proactive approach to exploring partnerships when they are in a position of strength to maximize the benefit for the community, whatever form that partnership may take.”


The healthcare information technology (HIT) sector continues to be extraordinarily active, as expected. These companies—particularly newer-stage companies—continue to hunt for capital and often find it through sale transactions. “HIT has been a mix,” said Nick Beale, Vice President, H2C. “Many of the companies that set out to raise growth capital become targets for strategic and financial buyers. With valuations continuing to remain remarkably high, some are simply looking for a liquidity event.”


For More Information


Insights regarding these two sectors are highlights from H2C’s full transaction database, which covers a broad range of healthcare sectors. If your institution is seeking to evaluate its options and opportunities, H2C is uniquely positioned to assist in the development and execution of forward-thinking strategies. Let us put our market knowledge and expertise to work for you. Contact an H2C professional directly, or send an email to


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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 and 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, visit



Kelly T. Duong
Hammond Hanlon Camp LLC

Lower activity in the second and third quarter is being driven by a combination of factors, but we hear consistent themes: lack of available opportunities and a stable economy.“  


       — Mike Tierney

           Vice President, H2C

Healthcare Transaction Volume Slows Year to Date
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