After a strong fourth quarter, senior care M&A activity cooled off this winter.
We thought that after 59 seniors housing and care M&A transactions were announced in December 2020, a monthly record, we had returned to some kind of “normal” in terms of dealmaking. Well that just didn’t happen in the first quarter of 2021, when despite widespread vaccination of the senior care population investor activity cooled to just 77 publicly announced deals. That is just a preliminary total but is well off Q4’s total of 127 deals.
M&A in the skilled nursing sector especially slowed down, accounting for just 32% of the deals announced during the quarter. But it makes sense. If various government relief efforts are supporting your bottom line for now, why rush to sell? But as Medicare advance payments come due, that mentality may start to shift.
In the end, we think this M&A slowdown represents a gap in the transaction pipeline caused by the period of inactivity last spring and summer. But as long as funding is available, third-party inspections can be completed and buyers and sellers agree on pricing, we hope to see a lot more closings this summer.
