Healthcare Services | Third Quarter 2017

November 2017 – Transaction volume in healthcare M&A for Q3 2017 totaled 334 transactions, 14% lower than the same period in 2016 and 10% lower than the preceding quarter, according to preliminary figures from Irving Levin Associates Inc. Deal value in Q3 2017 totaled $42.8 billion, 12% lower than the same period in 2016. The services sector remained strong in Q3 2017, with 211 transactions accounting for 63% of the total volume. Managed care transactions were up 167% from the same time last year led by Centene Corporation’s (NYSE: CNC) $3.8 billion deal to acquire not-for-profit Fidelis Care as an initiative to enter the State of New York, the second largest managed care state by membership in the U.S. eHealth transactions increased 45% as revenue cycle management companies remain a strong investment opportunity for financial buyers. As of mid-September, 52% of revenue cycle management targets were acquired by private equity firms or other PE-backed eHealth platform companies. The behavioral health sector was also active in the quarter with a 44% increase in transactions over the same period last year as strategic and financial buyers seek to capitalize on significant industry fragmentation and growing demand that currently outstrips supply. Recent legislative changes have expanded the availability of behavioral healthcare services and have opened new channels for industry activity.
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November 6, 2017