Second Quarter M&A Soars Above 100 Deals

Boosted by an especially strong April, senior care M&A in the second quarter skyrocketed above 100 transactions for just the second time ever, according to DealSearchOnline. The industry seemed to be in a deal slump over the past year and a half, never surpassing 81 deals in a quarter and falling way off the pace set in 2015 when we recorded 99 deals in Q3:15 and 108 deals in Q4:15, the all-time record. However, this April set the tone for the quarter with 47 deals announced. Activity petered out a bit as the quarter wore on (35 deals in May and just 22 in June), but that could be the effects of the summer lull. Either that, or everyone was deal-ed out by Memorial Day. In the end, we recorded 104 transactions in the quarter, which will almost certainly increase in the coming weeks and months.

Spending was robust too in the second quarter, reaching $6.25 billion or nearly as much as the three previous quarters combined. Q2:18’s largest deal was Welltower’s announced acquisition of Quality Care Properties in April, for $4 billion. On top of that, we have seen an unprecedented number of large skilled nursing divestments from public REIT owners this quarter.

For comparison, buyers spent over $9.8 billion in the second quarter of 2017, pushed up by Sabra Health Care REIT’s acquisition of Care Capital Properties for $3.996 billion and Columbia Pacific Advisors’ $2.6 billion purchase of Hawthorne Retirement Group. Will this M&A pace continue into Q3? Our guess is it will be difficult.

 

 

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