Healthcare M&A Slows in Q2 2024

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Healthcare mergers and acquisitions (M&A) experienced a slight downturn in the second quarter of 2024. While deal volume remained relatively high, the total value of announced transactions decreased compared to the previous quarter and the same period last year.

Physician medical groups (PMGs) continued to be a hotbed of activity, although deal numbers declined year-over-year. Dental care dominated the PMG sector, driven largely by private equity-backed platforms.

The hospital and health systems sector saw a mix of activity. While overall deal volume was flat, there were several significant strategic partnerships and acquisitions among academic medical centers and nonprofit organizations. Notably absent were for-profit health system acquirers.

The long-term care sector experienced a surge in M&A, with senior housing and care deal volume increasing by 21% compared to the previous quarter. This growth is fueled by several factors: an aging population, increasing occupancy rates approaching pre-pandemic levels, and a favorable investment climate. The industry is witnessing a consolidation trend as larger operators seek to expand their geographic footprint and achieve economies of scale.

The home health and hospice sector also saw a significant uptick in M&A activity, driven by a growing preference for home-based care. However, increased regulatory scrutiny has tempered investor enthusiasm in the hospice segment.

Finally, the behavioral health market remained relatively stable, with private equity continuing to be a major force in the sector. The increasing prevalence of mental health conditions coupled with a shortage of providers has made behavioral health an attractive investment area. However, challenges such as reimbursement rates and access to care continue to impact the sector.

Overall, the healthcare M&A landscape is evolving. While certain segments, like long-term care and home health, are experiencing growth, other areas, such as hospitals and physician groups, are showing signs of consolidation. The ongoing shift towards value-based care and the increasing role of technology are likely to shape the industry’s M&A trajectory in the coming quarters.

Healthcare Services | Second Quarter 2024

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July 2024 – Healthcare M&A Slows in Q2 2024

Healthcare mergers and acquisitions (M&A) experienced a slight downturn in the second quarter of 2024. While deal volume remained relatively high, the total value of announced transactions decreased compared to the previous quarter and the same period last year.

Physician medical groups (PMGs) continued to be a hotbed of activity, although deal numbers declined year-over-year. Dental care dominated the PMG sector, driven largely by private equity-backed platforms.

The hospital and health systems sector saw a mix of activity. While overall deal volume was flat, there were several significant strategic partnerships and acquisitions among academic medical centers and nonprofit organizations. Notably absent were for-profit health system acquirers.

The long-term care sector experienced a surge in M&A, with senior housing and care deal volume increasing by 21% compared to the previous quarter. This growth is fueled by several factors: an aging population, increasing occupancy rates approaching pre-pandemic levels, and a favorable investment climate. The industry is witnessing a consolidation trend as larger operators seek to expand their geographic footprint and achieve economies of scale.

The home health and hospice sector also saw a significant uptick in M&A activity, driven by a growing preference for home-based care. However, increased regulatory scrutiny has tempered investor enthusiasm in the hospice segment.

Finally, the behavioral health market remained relatively stable, with private equity continuing to be a major force in the sector. The increasing prevalence of mental health conditions coupled with a shortage of providers has made behavioral health an attractive investment area. However, challenges such as reimbursement rates and access to care continue to impact the sector.

Overall, the healthcare M&A landscape is evolving. While certain segments, like long-term care and home health, are experiencing growth, other areas, such as hospitals and physician groups, are showing signs of consolidation. The ongoing shift towards value-based care and the increasing role of technology are likely to shape the industry’s M&A trajectory in the coming quarters.

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Retail | Fourth Quarter 2023

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Retail | Fourth Quarter 2023

March 2024 – Retail M&A activity in Q4 2023 rose by 27% to 52 transactions and the Specialty Retailer subsector, comprised 40% (21) of all Retail Sector M&A deals during Q4.

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Healthcare Services | Fourth Quarter 2023

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Healthcare Services | Fourth Quarter 2023

February 2024 – This Fourth Quarter of 2023 issue of SOLIConnect includes a discussion concerning Healthcare M&A activity declining in 2023 along with mounting labor costs that are continuing to negatively impact broader investor demand.

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Capital Restructuring | Fourth Quarter 2023

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Capital Restructuring | Fourth Quarter 2023

January 2024 – This Fourth Quarter of 2023 issue of SOLIConnect includes a discussion concerning default rates soaring in 2023, particularly in consumer facing companies, and could continue to climb in 2024 as cash-strapped companies are burdened with high interest rates.

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Business Services | Fourth Quarter 2023

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Business Services | Fourth Quarter 2023

January 2024 – This issue of SOLIConnect includes a discussion with a regard to a 10.2% increase in the Business Services Sector Index (“SBSS Index”) during Q4 2023, in line with the 11.2% increase experienced by the S&P 500 as optimism for declining interest rates in 2024 drove market valuations higher. However, performance within the SBSS Index varied significantly by sector. HR Services, which is dominated by payroll processors that benefit from rising interest rates, and Business Process Outsourcing, which is facing downward pressure in both demand and pricing from emerging AI applications, were both flat for the quarter. On the other hand, Marketing Services, which is driven by digital marketing but also benefitted from the end to the writers strike, was up 17.3%. Information Services (20.6%) and IT Consulting (12.8%) both outperformed the broader market as demand for IT services and supporting data continues to accelerate.

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Retail | Third Quarter 2023

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Retail | Third Quarter 2023

November 2023 – This Third Quarter 2023 issue of SOLIConnect includes a discussion a discussion with regard to the 23% decline in M&A activity in the sector to 41 transactions. Retail inventories rose slightly, along with retail sales (+1.5% quarter over quarter), suggesting some recovery in consumer spending habits during the quarter.

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Healthcare Services | Third Quarter 2023

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November 2023 – This issue of SOLIConnect reports that Healthcare M&A activity declined in Q3 2023, dropping to approximately 500 deals, 16% lower than the prior quarter and 19% lower than Q3 2022. M&A transaction dollar volume in Q3 2023 totaled $36.8 billion, a decline of 41% compared with the $62.6 billion in Q2. The M&A slowdown was pervasive across many healthcare verticals with Physician Medical Groups (PMG) experiencing some of the steepest declines of the quarter with 120 deals, a 20% decrease compared to the previous quarter.

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Industrial Growth | Third Quarter 2023

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Industrial Growth | Third Quarter 2023

November 2023 – Merger and acquisition activity in the Industrial sector remained steady in Q3 with 127 transactions, as prolonged expectations for high interest rates kept transaction activity constant. While transaction volumes did not change on a quarter-over-quarter basis, acquisition trends differed from the prior quarter with Industrial manufacturers, especially larger public and private equity backed companies, appearing more comfortable deploying capital in middle-market transactions. Public companies were very active acquirers across all sectors as they sought market advantages by acquiring companies with manufacturing synergies or new business segments.

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