M&A activity between hospitals and health systems in the second quarter of 2022 returned to both trendlines Kaufman Hall has been tracking since the pandemic began. First, the number of announced transactions, 13, remained below what was seen in the years leading up to 2020 but was consistent with numbers for Q2 2021, when 14 transactions were announced. Second, the small number of transactions were offset by a high percentage of “mega” transactions, in which the smaller party or seller has annual revenues in excess of $1 billion (an exception to this trend was Q1 of this year, when no mega transactions were announced and 10 of the 12 announced transactions had smaller parties with less than $500 million in annual revenue). Indeed, the average size of the smaller party reached a record-setting $1.5 billion this quarter.
In addition to the two mega transactions this quarter, two other announced transactions involved a smaller party with annual revenues in excess of $500 million. These transactions included:
- Advocate Aurora Health/Atrium Health (smaller party revenue of $12.9 billion)
- MercyOne/Trinity Health (smaller party revenue of $3.0 billion)
- Bellin Health System/Gundersen Health System (smaller party revenue of $800 million)
- George Washington University Hospital/Universal Health Services (smaller party revenue of $600 million)
