• Mon. Dec 4th, 2023

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Merger and acquisition deal volumes to continue increasing, PwC finds

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Despite a shaky economy and fears of a recession, healthcare mergers and acquisitions are expected to continue with ever-increasing transaction volumes, according to a new analysis from PricewaterhouseCoopers.

Transaction volumes will continue to increase due to enhanced attention on private equity platform add-ons and the continued resilience of the sector, analysts project. And value-based care is expected to be on the rise. Fee-for-service-focused models are in the rear-view mirror, and players are diving in and embracing value-based care throughout the ecosystem, PwC found.

These factors, along with continued large levels of corporate cash, translate into a continued strong outlook for health services deal volumes in 2023.


Health services deal volumes increased further from the levels seen in 2021, but have softened thus far in Q4. Year-over-year deal volumes increased in each quarter through Q3, though some pullback has been seen in the current quarter through November 15 – 251 announced deals in Q4 through November 15, versus 307 in the same period in 2021.

While deal volumes have continued to increase, deal values have declined from the peak set in 202 – a function of smaller-value roll-up and platform add-on transactions representing a greater portion of activity in the current year.

Home health and hospice continued to be a subsector driving transaction value this year. This was one of only two subsectors that saw growth in announced deal value from 2021 levels as pandemic-driven interest in alternative and patient-accessible care models continued to be a key theme.

There were 114 home health and hospice deals in the 12-month period ending November 15. These contributed to a 74% increase in deal value from 2021. This growth in deal value was driven by two megadeals: CVS’ acquisition of Signify Health for $8 billion and UnitedHealth/Optum’s acquisition of LHC Group for $6 billion, though that last deal is currently on hold.

Nearly half of the announced deal value over the past year was from megadeals, consistent with the ratio seen in 2021. The 12 months ending November 15 had seven megadeals, including an $18 billion merger between two healthcare real estate investment trusts and an $8.9B acquisition of Summit Health-City MD, a provider of primary, specialty and urgent care services, by Village MD, a Walgreens subsidiary. These two deals collectively represent $26.9B of the total $44.3B of other services deal value during the year. 

Other megadeals included Quidel Corporation’s acquisition of Ortho Clinical Diagnostics ($8 billion), Mediclinic International’s acquisition by a consortium of investors ($7.4 billion) and Chubb’s acquisition of Cigna’s life, accident and supplemental benefits businesses ($5.4 billion).


Merger and acquisition activity between hospitals and health systems remained low in the third quarter of 2022, with just 10 announced transactions – comparable to Q3 2021, which saw seven announced transactions, according to an October Q3 analysis from Kaufman Hall.

While the volume of announced deals was scant, the value of the deals that did occur remained high. Two deals in the quarter met the level of a mega transaction, defined as when the smaller party in a deal sees annual revenues in excess of $1 billion. 

Those two transactions include Pure Health’s $500 million minority equity investment in Ardent Health Services, and a transaction involving the sale by Medical Properties Trust of nine hospitals and two related medical office buildings in California, Indiana, Nevada and Pennsylvania to Prime Healthcare, pending a tenant purchase option.

Twitter: @JELagasse
Email the writer: [email protected]


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