Nearly $74.3 billion was committed to fund 597 hospital mergers and acquisitions that were announced during the first decade of the 21st Century.
The data from Norwalk, Conn.-based Irving Levin Associates reveals that a heavy concentration of the targets in hospital mergers and acquisitions announced during the 10-year period ended Dec. 31, 2009 were in California, Florida, Pennsylvania, Illinois, Tennessee, Alabama, Texas, Georgia and Louisiana.
The hospitals and hospital companies targeted in those mergers and acquisitions were producing annual revenues ranging from $1.5 million to $25 billion. Among the same hospital deals, the number of beds involved ranged from single facilities with as few as nine beds to a chain comprised of 176 hospitals, 92 outpatient surgery centers and affiliated services, with a total of 41,850 beds.
In each of the top 25 largest (by price) hospital mergers and acquisitions announced during the decade, the target was a company producing annual revenues in excess of $215 million at the time of acquisition.
HCA, Inc., posted the greatest annual revenue of any hospitals or hospital companies targeted in mergers and acquisitions announced during the 10-year period. The Nashville-based hospital company posted annual revenue of $25 billion on a trailing 12-month basis at the time its acquisition by a private equity consortium was announced in 2006.
With the next-greatest annual revenue among targets in hospital acquisitions during the same 10 years, Triad Hospitals posted annual revenue of $5.4 billion on a trailing 12-month basis at the time its acquisition by Community Health Systems was announced in 2007. Triad Hospitals was trailed by Health Midwest, which posted annual revenue of $2.4 billion on a trailing 12-month basis at the time its acquisition by HCA, Inc., was announced in 2002.
Among the top 25 hospital acquisitions, based on price, announced during the 10-year period, three companies announced two hospital acquisitions apiece.
Health Management Associates acquired five Tenet hospitals in 2003 for $515 million and three Bon Secours hospitals in 2004 for $279.1 million.
Ascension Health acquired Baptist Hospital in 2001 for $341 million and the Carondelet Health System in 2002 for $260 million.
Capella Healthcare acquired a group of nine hospitals in 2007 for $315 million and a group of five hospitals in 2005 for $260 million.
The largest hospital acquisition of the last decade was the acquisition of HCA, Inc., by a private equity consortium in a mega-deal valued at $33 billion, announced in 2006. In the next-largest deal, Triad Hospitals was acquired by Community Health Systems for $6.8 billion in 2007, followed in size by Triad Hospitals’ acquisition of Quorum Health Group for $2.4 billion, which occurred in 2000, and Welsh Carson Anderson Stowe’s 2004 acquisition of Select Medical Corp. for $2.3 billion.
Four other deals announced during the decade were also valued in excess of $1 billion, including three announced in 2004: Lifepoint Hospitals acquired Province Healthcare Company for $1.8 billion, The Blackstone Group acquired Vanguard Health Systems for $1.75 billion and Texas Pacific Group acquired Iasis Healthcare for $1.4 billion.
The target in the largest deal of the decade, HCA Inc., was on the buy side in 2002 when it acquired Health Midwest for $1.04 billion.
Among the 25 largest hospital mergers and acquisitions announced in the 10-year period, approximately 44 percent of the acquirers were privately held companies. For the same 10-year period, the remaining percentage of deals was evenly split between nonprofit acquirers (28 percent) and publicly traded companies (28 percent).