Understanding the Mergers & Acquisitions Landscape in 2020
Author: Vivek Mathew Posted: July 30, 2020
Hospice mergers and acquisitions were quite robust throughout the first quarter of this year. This remained true until COVID-19 turned our worlds upside down. As the number of infected patients rose in the United States, M&A transactions took a downward trend. Added costs associated with personal protective equipment (PPE) for staff and patients negatively affected providers as they protected their organization from the pandemic. As the year progresses forward in the midst of a contagious virus, where does this leave mergers and acquisitions?
Reasons for a downturn in M&A
The downturn in mergers and acquisitions happened due to the pandemic. Traditional buyers in the space were more focused on their own operations than a new hospice. Specifically, they focused on the access of PPE for their patients and staff. New protocols to ensure safety of their facilities also altered operations within organizations. As a result, banks were a bit hesitant to lend to buyers in mid-March and thus halted these acquisitions to later in the year.
Looking forward
Strong acquisitions of hospices were relevant in 2019. This was mainly because of disruptions in home health due to the enactment of the Patient Driven Groupings Model (PDGM). A greater acceptance and need for hospice care was also an important factor for many mergers and acquisitions in 2019. As states begin to reopen and acquire PPE for their staff and patients, a rise in M&A will likely occur as the year closes. Organizations that were impacted by the pandemic will likely be included in smaller transactions in 2020 as the industry continues to consolidate.
How MHA can assist with your M&A
MHA has helped several organizations through these stressful developments of a merger and acquisition. We're are able to account for pandemic related issues and account for those pressure points as we continue to maintain a seamless process. MHA’s experience and expertise will ensure your organization experiences a smooth transition through your M&A. Contact us to learn more.