Senior Care M&A Spending Drops 44% in 2012 to $9.2 Billion

Long-term care merger and acquisition spending mirrored broader healthcare industry trends in 2012, dropping more than 44% compared to the previous year to just under $9.2 billion, according to Irving Levin Associates, Inc.,

Dealmakers committed $143.3 billion to finance healthcare M&A activity last year, down 38% from the $231 billion spent in 2011 and the lowest amount on record since 2003. Of that, $9.18 billion was spent in the long-term care industry, compared to 2011’s $16.4 billion.

However, deal volume actually increased for both the long-term care and overall healthcare industry, at 9.3% and 5.9%, respectively.


The long-term care industry recorded 188 deals in 2012, up from the previous year’s 172 deals.


“The fact that the number of M&A transactions was so high, despite the drop in dollar volume, indicates a strong case of market breadth with buyers going after more strategic deals and not the blockbusters,” said Stephen Monroe, partner at Levin Associates, in a statement.


The biotechnology and eHealth sectors  also saw positive change in deal volume, both increasing more than 30%, even though the dollar amount going into those deals decreased.

Home health and hospice dollar volume shot through the roof, jumping 1,872.1% to nearly $5.72 billion, compared to 2011’s nearly $290 million and a 20.7% increase in deal volume.

“Health care M&A activity will stay strong through 2013 as the services sector particularly looks forward to welcoming many more insured patients once the Affordable Care Act fully takes effect on January 1, 2014,” said Lisa Phillips, editor of The Health Care M&A Report.

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Written by Alyssa Gerace