As last reported, the long-term care (LTC) merger & acquisition (M&A) market had a record year in 2011 in terms of transaction volume, reporting approximately 74 percent more transactions than the annual average for the previous three years. Although 2011 was a tough year to follow for LTC M&A, the first quarter of 2012 started strong, matching the same period in 2011 with 39 reported transactions.
Long-Term Care M&A Activity Accelerates With consecutive increases in transaction volume each of the last six quarters, long-term care (LTC) mergers and acquisitions (M&A) volume has been on a torrid pace following the 40-transaction jolt in fourth quarter 2009. This accelerated deal volume can be traced to a number of factors affecting buyers and sellers. What’s driving sellers: Increased regulation and reimbursement pressures Uncertainty about future reimbursement Aging facilities needing major renovations or replacement Improving valuations Beginning wave of baby boomer owners nearing retirement age What’s driving buyers: The need to spread overhead costs due to regulatory and reimbursement changes Availability of cheap financing The impending wave of baby boomers needing future care As the graphs below illustrate, after 110 transactions in 2010, there have already been 74 reported through the first half of 2011