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Financial distress a key driver of deals
Health care mergers expected to increase: ©Leowolfert - stock.adobe.com
A Kaufman Hall year-end analysis revealed a substantial increase in merger and acquisition activity within the health care sector in 2023, with 65 announced transactions compared to the previous year's 53. The report highlighted the prominence of financial distress as a key factor influencing these transactions, marking 28% of deals, up from 15% in 2022. The analysis illustrates the challenges faced by hospitals and health systems in 2022, including sustained negative median operating margins, which continued to drive M&A decisions in 2023.
The report's other key findings include:
The report also provides insights into anticipated trends in 2024:
The report also noted that with 2024 being a general election year, there is a potential impact of political outcomes on health care and partnership activities, presenting an additional variable in an evolving landscape.
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