The second quarter saw senior care M&A sustain its very high level, but deal activity across the other 12 healthcare sectors that we track on our LevinPro HC platform experienced a 9% drop in dealmaking from 622 publicly announced deals in the first quarter of 2022 to 568 in Q2. Compared to Q4:21, the quarterly deal total has also dropped by over 10%.
We cover a number of healthcare sectors from hospitals and home health to eHealth and Biotech, and the most popular sector of late (by far) has been Physician Medical Groups. Last quarter, we recorded 142 PMG deals, 54% of which were made by a private equity buyer. Compare that to 5% of the 135 long-term care deals announced in the second quarter; and yet we get the negative press. I digress.
A number of factors could have contributed to the drop in healthcare M&A activity, which still remains historically high compared to pre-pandemic levels, as our Analytics in LevinPro HC show. A potential recession, a bear market, a volatile interest rate environment all could have led investors to hit pause on a number of transactions. But, private equity groups need to put their billions of dollars to work and generate an acceptable return, and healthcare with its innovations, government incentives and demographics, stands out among other industries to do just that in the long-run.
