Health care M&A volume remained stable in third quarter of 2024
Activity in sectors such as physician medical groups and other services drove much of the volume in the third quarter, with 112 and 140 deals, respectively.
“There’s been a noticeable stabilization in health care M&A activity this quarter, despite significant pressures weighing on the sector,” said Avery Swett, editorial analyst at Irving Levin Associates, which publishes the data on its LevinPro HC platform.
The value of third-quarter deals totaled about $44 billion. Although this was 8% less than the second-quarter value, it still was 6% greater than during the same period previous year. The largest deal by price was TowerBrook Capital Partners’ and Clayton, Dubilier & Rice’s $8.9 billion acquisition of R1 RCM, a Chicago-based revenue-cycle management company focused on transforming the patient experience and financial performance of providers.
Activity in sectors such as physician medical groups and other services drove much of the volume in the third quarter, with 112 and 140 deals, respectively. Among other sectors:
- Demand for health care real estate, such as medical outpatient buildings and properties, continues to drive high deal volume in other services.
- Activity in the behavioral health care and laboratories and MRI and dialysis sectors decreased 28% and 32% from the previous quarter, respectively.
- Home health and hospice saw the largest decline, with 18 deals announced during the third quarter, representing a 40% decrease from the previous quarter.
- Health care services sectors remained sluggish in the third quarter because of ongoing financial pressures in the industry.
Related: Health care M&A: Pharma makes moves, hospitals consolidate, scrutiny grows
- Health technology markets maintained stable activity, with a 1% increase over the second quarter of 2024 but 5% below the third quarter of 2023.
- Although the biotechnology sector saw a decline of 28%, activity in the health technology sectors was driven mostly by pharmaceutical deals, which increased by 36% to 19 deals.
- The hospital sector saw a slight increase, with 21 deal announcements. The largest hospital deal of the third quarter by price was Tenet Healthcare Corporation’s $910 million cash sale of its majority stake in Brookwood Baptist Health to Orlando Health, which has been scaling up its presence across several markets throughout the year.
“While challenges remain in areas like behavioral health and home health, we’re seeing resilient demand for physician medical groups and health care real estate, which continue to fuel deal flow,” Swettt said. “Looking ahead, the lower- and middle-market segments, driven by private equity and larger health systems, are likely to remain active as they navigate ongoing industry consolidation.”