Long-Term Care Deal Value Reaches $14.4 Billion in 2016

Last year was busy for health care M&A, with $71.7 billion worth of deals recorded nationwide. Out of all health care sub-sectors, long-term care had the biggest year in terms of deal volume and deal value, according a newly released PricewaterhouseCoopers (PwC) report.

The long-term care sub-sector included skilled nursing facilities and private pay senior living options. 

There were 337 long-term care deals in 2016, according to the PwC report. The total was similar to the number of long-term care deals in 2015, the report says.


Unlike 2015, though, long-term care was the largest sub-sector by deal value of $14.4 billion. Long-term care also had the greatest share of health care deals at 36% in 2016.

Beyond long-term care, other leading sub-sectors for deal volume growth included rehabilitation and physician medical groups. Managed care was lacking in both volume and value, according to the report.

Out of the seven health care sectors considered, home health/hospice also had a strong year. The sector had the highest mean enterprise value to EBITDA multiple last year, at 15.2, the data show. At 2.5x, home health/hospice also had the largest increase in multiple value compared with 2015. 


Fewer managed care mega deals in 2016 played a large role in keeping health care M&A activity from matching 2015 levels, according to PwC.

Health care M&A has momentum heading into 2017, but Trump administration policies and governmental review of certain large mergers could complicate matters, PwC U.S. Health Services Deal Leader Thad Kresho said in the report.

Written by Alana Stramowski

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