Report: More health care M&A expected

Locals off to strong start with four major deals in 2014

Health care mergers and acquisitions dropped last year to 385 deals worth $97 billion, down from 459 deals worth $124 billion in 2012, according to a report published by Bass, Berry & Sims PLC and Mergermarket.

Uncertainty surrounding the implementation of the Affordable Care Act played a role in last year's M&A drop, the report said, but a firmer understanding of the new law could set the stage for greater activity in 2014.

The report also found that hospitals, health care providers and health care IT companies are the sectors most likely to see increased consolidation in the coming year.

"This year we're seeing significant implications from the Affordable Care Act take hold," Angela Humphreys, Bass, Berry & Sims health care transactions attorney, said in a release. "Reforms like these are pushing providers to more, better, for less — which in turn drives them to consolidate to become stronger in this new health care climate.

Locally, health care M&A is off to a strong start in the first half of 2014, with major deals such as Franklin-based Community Health Systems' $7.6 billion acquisition of Health Management Associates in January. In February, Brentwood-based Brookdale Senior Living announced the purchase of Emeritus Corp., the senior living operator's largest competitor, for $2.8 billion. AmSurg Corp. will double in size via a $2.3 billion acquisition of Sheridan Healthcare, and Acadia Healthcare is paying $660 million for United Kingdom-based Partnerships in Care.

"As the reimbursement and regulatory landscapes change dramatically, health care companies are jockeying to be better positioned to leverage capital resources and a stronger infrastructure," Leigh Walton (pictured), Bass, Berry & Sims health care transactions attorney, said in the report.