Blog Author

David Jasmund

E: djasmund@pcecompanies.com

Follow me: LinkedIn

Industry Trends

Hospitals Seek Increase in Treatment Costs

With nurse pay increasing more than 9% since June 2021, some hospitals have requested an increase in their treatment costs by as much as 15%. The request, which typically ranges between 4% to 6%, is getting pushback from insurers and employer groups, wanting the priciest hospitals to absorb higher labor costs without raising rates. Historically, hospitals win 3% price increases. If the request is approved, employers and workers may experience higher premiums.1

Antitrust Authorities Examine PE Healthcare Investments

With rising private equity (PE) healthcare investments, regulators are increasing scrutiny over accusations made by PE firms. Regulators fear they are suppressing competition in the marketplace. There are additonal concerns over the quality of care patients are receiving, with regulators citing studies showing worse patient results at PE-owned institutions. Antitrust authorities are pushing forward with the enforcement of anti-monopoly provisions on firms with market power to harm consumers or workers. This year, PE investments have reached $22.7 billion, following a record $91.5 billion in 2021.2

Oracle to Develop National Healthcare Record Database

Oracle closed its largest-ever acquisition by acquiring electronic health records company, Cerner, in June. The $28 billion acquisitioncomes as Oracle plans to develop a "unified national health records database" to give providers access to patient records across states and systems in emergencies. The database will also give researchers access to real-time data and information on metrics like disease incidence to help shape policy responses.3 4

Merck & Co. in Talks to Acquire Seagen Inc.

Merck, a multinational pharmaceutical company, is discussing acquiring Seagen. The acquisition would be one of the largest of the year, with a valuation of over $30 billion. The two companies, currently collaborate on breast cancer therapies. The merger would help replenish Merck’s cancer-drug portfolio when Keytruda, the $17 billion blockbuster drug, loses patent protection later this decade. There is still significant uncertainty about whether the deal will close following regulators increased scrutiny of industry consolidation.5 6

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Cerner Corporation
  • Oracle Corporation
  • $30,201.21
  • Ortho Clinical Diagnostics Holdings plc
  • QuidelOrtho Corporation
  • $8,424.11
  • Cloudmed
  • R1 RCM Inc.
  • $4,030.96
  • DentaQuest Group, Inc.
  • Sun Life and Health Insurance Company (U.S.)
  • $2,475.00
  • Clinigence Holdings, Inc.
  • Nutex Health, Inc.
  • $2,311.89
  • Tivity Health, Inc.
  • Stone Point Capital LLC
  • $2,058.47
  • Intersect ENT, Inc.
  • Medtronic plc
  • $1,073.50
  • Merative L.P.
  • Francisco Partners Management, L.P.
  • $1,065.00
  • Antares Pharma, Inc.
  • Halozyme Therapeutics, Inc.
  • $1,037.52
  • AmerisourceBergen Corporation
  • Undisclosed Buyer
  • $900.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • SOC Telemed, Inc.
  • Patient Square Capital, LP
  • $398.73
  • IntriCon Corporation
  • Altaris Capital Partners, LLC
  • $246.33
  • Medical Office Building in Irvine, California
  • Anchor Health Properties, LLC
  • $27.60

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Net Assets of Allscripts Hospitals and Large Physician Practices Business Segment
  • N. Harris Computer Corporation
  • $700.00
  • GeneDx, Inc.
  • Sema4 Holdings Corp.
  • $623.20
  • Scanning Technology business of Carestream Dental LLC
  • Envista Holdings Corporation
  • $582.50

 

Source S&P Capital IQ as of 7/8/2022 and PCE Proprietary Data

New call-to-action

PCE Transactions

Contacts

Michael Poole

Orlando Office

407-621-2112 |

Read More

David Jasmund

Orlando Office

407-621-2111 |

Read More

Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. Evans, Melanie. “Hospitals Look to Raise Treatment Costs as Nurses’ Salaries Increase.” The Wall Street Journal, 8 June, 2022.
  2. Cumming, Chris. “Antitrust Authorities Take Aim at Private-Equity Healthcare Deals.” The Wall Street Journal, 14 June, 2022.
  3. Pifer, Rebecca. “Oracle closes $28B buy of ‘huge growth engine’ Cerner.” Healthcare Dive, 8 June, 2022.
  4. Pifer, Rebecca. “Oracle announces plans to create national health record database on heels of Cerner deal.” Healthcare Dive, 10 June, 2022.
  5. Wainer, David. “Merck Acquisition Would Test Emboldened Regulators.” The Wall Street Journal, 22 June, 2022.
  6. Cimilluca, Dana, Lombardo, Cara & Rockoff, Jonathan. “Merck Pushes Forward With Potential Deal for Seagen.” The Wall Street Journal, 23 June, 2022.
RELATED RESOURCE
RELATED RESOURCE

Resource Title goes here

Read now
contact usan image