Behavioral Health Care M&A Activity Surged in Q3:2015

Behavioral Health Care M&A Activity Surged in Q3:2015

The behavioral health care acquisition market surged in the third quarter of 2015.

A total of 10 transactions were announced in this year’s third quarter, 67% more than the second quarter and more than double the four transactions publicly announced in the third quarter of 2014. Prices are usually not disclosed in this market, but in the third quarter there were two large acquisitions, one for $350 million by Universal Health Services and another for $200 million by Molina Healthcare. The remaining eight transactions did not have a disclosed price.

“Not only was this one of the most active quarters we have ever seen in the behavioral health care market, but we are on pace for a record number of announced acquisitions for any full year,” commented Lisa E. Phillips, Editor of The Health Care M&A Report, which publishes the data. With 24 announced acquisitions in this sector for the first three quarters of the year, the transaction volume is up 50% compared with the first three quarters of 2014. “There has been increased interest in this once sleepy market, not only because of the underserved need for behavioral health care, but because insurance coverage and reimbursement policies may be easing for various types of behavioral health care,” stated Phillips. This market is expected to see an uptick in new development of inpatient care facilities, and that real estate component may drive investor interest as well.

All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the Health Care M&A Information Source.