Long-Term Care Leads Other Sectors in M&A Volume

Long-term care (LTC) deals played a key role in an overall increase in “megadeals” in the health services industry, according to a new analysis from Pricewaterhouse Coopers (PwC).

Overall, 219 deals occurred throughout the health services industry, totaling to $49.6 billion, signifying a year-over-year increase of more than 201%, and a 514% jump from the first quarter of 2017. The performance is also the strongest the health services industry has seen since Q3 2015, according to PwC.

LTC volume led the pack among sub-sectors, accounting for 75 of the 219 deals, or 34% of all second quarter 2017 transactions in the industry. That’s 17% year-over-year deal decline by volume, but a spike of 299% by value for the sub-sector.


Driving this significant growth is the number of “megadeals” — transactions exceeding $1 billion — in the second quarter. Since 2015, the average number of megadeals remained at about four per quarter; performance in Q2 2017, however, eclipsed this average with a total of 10, accounting for more than $43 billion in deal value, or 87% of the quarter’s total.

Two long-term care megadeals in particular helped boost overall performance, representing $6.6 billion in total value: The merger of Sabra Health Care REIT (NASDAQ: SBRA) and Care Capital Properties, Inc., for $4.0 billion; and Columbia Pacific Advisors LLC’s (CPA) announced acquisition of Hawthorn Retirement Group.

The terms of the latter deal were undisclosed, but PwC reported the figure at $2.6 billion; sources close to the deal had reported the value at closer to $2 billion at the time of the transaction.


Written by Carlo Calma

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