Senior Housing M&A Activity Shatters Records in 2014

With the top 10 senior housing deals of 2014 exceeding several billion dollars, it’s no wonder merger and acquisition activity broke records for the year — and exploded in the fourth quarter.

The senior housing and care market set a record with 83 announced transactions worth $8.7 billion in the fourth quarter, according to the latest M&A data compiled by Irving Levin Associates. This puts the total activity for the year at more than 280 transactions worth a combined $25.75 billion, representing increases of 27% and 121%, respectively.

December, in particular, rounded out the year with 29 announced transactions — 40% of which were concentrated in the skilled nursing market — worth nearly $2.75 billion. While a good portion of the transactions involved skilled nursing, 90% of the amount invested skewed toward senior housing, the less regulated and private pay side of the industry.

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Additionally, health care M&A activity reflected a growing appetite for the sector as a whole, with at least 345 transactions announced in the fourth quarter, up 1% compared with the previous quarter, according to Irving Levin Associates. Health care spending reached $138 billion, a 119% increase from the third quarter.

The previous record for fourth-quarter deal volume was set in December 2012, which had 318 transactions. The previous peak for spending was $82.2 billion, set in the fourth quarter of 2006.

Full-year totals for 2014 health care M&A activity soared past record-highs, representing nearly 1,300 announced transactions and reaching up to $387.4 billion. The new record far surpasses the prior one, set in 2006 at $268.5 billion.

Written by Emily Study