Healthcare M&A Activity Surges in Q2

Excluding the German hospital deal, the dollar volume of hospital M&A activity for the second quarter 2012 totaled around $600 million for 21 transactions. The largest hospital M&A transaction reported in the quarter was Highmark Blue Cross Blue Shield's $275 million acquisition of controlling interest in Pittsburgh's Jefferson Regional Medical Center.

The quarter is well off the pace set for hospital M&As in second quarter of 2011 when 32 transactions valued at $3.5 billion were reported. Two blockbuster deals were the hallmarks of that quarter:  The acquisition of West Penn Allegheny Health System by Highmark, with a value of $1.5 billion, and HCA Holdings' acquisition of the remaining interest in HealthOne, which was valued at $1.4 billion.

Levin Associates' Monroe expects to see an uptick in 2012 M&A activity now that the Supreme Court has upheld the individual mandate and "there is more certainty." But some uncertainty remains, particularly in relation to the upcoming elections, especially if Republicans take over Congress and the White House and try to disassemble healthcare reform.