Mega deals drive historic high $19.2 billion in health care mergers

Fewer deals, but big money dominates

The second quarter of 2022 saw a historic high of $19.2 billion in total transacted revenue in health care transactions, according to Kaufman Hall’s Quarterly Mergers and Acquisitions Report. This is more than double the transacted revenue of the same quarter last year. The biggest contributor to second quarter transacted revenue is from the planned merger of Advocate Aurora Health and Atrium Health.

The trend of mega transactions is also continuing, with two deals where the smaller party has total annual revenue of more than $1 billion, plus two deals where the smaller party had revenue in excess of $500 million. Kaufman Hall notes that this may signal a long-term shift in hospital and health system mergers toward fewer, but ultimately larger transactions. The average size of the smaller party was a record-setting $1.5 billion this quarter.

Overall, the number of announced transactions, 13, is below pre-pandemic numbers, but consistent with numbers from the second quarter of 2021, when 14 were announced. In three of the announced second quarter transactions, the acquirer was a for-profit health system. In one transaction, there was a university-affiliated acquirer and there was one religion-affiliated acquirer. Nonprofit health systems were the acquirer in the remaining transactions.