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The number of hospital and health system mergers and acquisitions saw a sharp decline in the first quarter of the year, but the average transaction size soared, finds new analysis from industry consultant Kaufman Hall. This trend is a reversal from Q1 2020, when COVID-19 first began to take hold in the U.S.
In total, there were 13 announced deals in Q1 2021, compared to 29 in 2020.
Average seller size by revenue was $676 million due to a pandemic-induced rise in mega mergers (involving two companies with over one billion dollars in annual revenue) and transactions with seller revenues between $500 million and $1 billion. The scale of Q1 transactions led to a high number of hospital facilities, 72 total, included in the announced deals.