Gary W. Herschman and Anjana D. Patel, Members of the Firm in the Health Care & Life Sciences practice, in the firm’s Newark office, were quoted in Bloomberg Law Health Law & Business, in “Health-Care Deals Drop in April, but Some Doctors Eyeing Mergers,” by Sara Hansard. Zachary Taylor, Associate in the Health Care & Life Sciences practice, in the firm’s Newark office, also contributed to the article.
Following is an excerpt:
Health-care deals declined in April as the coronavirus pandemic has forced investors to delay or reconsider planned mergers and acquisitions.
But transaction activity is expected to pick back up later this year as physicians and independent hospitals hard hit by canceled procedures look to partner with larger health systems to help relaunch their businesses, analysts say.
The 106 transactions in April marked the lowest number of deals announced or closed during any month in 2020. The number of deals had dropped from 140 in March. …
Physicians Eye Partnerships
“Many independent hospitals and small health systems around the country are feeling the ill effects of having to postpone or delay elective procedures and other non-emergency services as a result of Covid-19,” Gary Herschman, a member of Epstein Becker Green in Newark, N.J., said.
“But merger and acquisition activity among independent hospitals is expected to rise sharply towards the second half of this year and into 2021, as they look to partner with larger health systems with substantial capital and advanced infrastructure to help them weather difficult times,” he said.
“For the same reason, merger activity of distressed hospitals and those in bankruptcy is also expected to increase,” Herschman added.
“Physician groups across the country, who have similarly been devastated by Covid-19, will also be flocking to join larger organizations—such as hospital systems, national healthcare companies, and large platform groups backed by private equity investors,” he said.
“Merger activity in long-term care, which was on the rise, has declined substantially with only five transactions in April, as many facilities deal with the heavy toll of the pandemic on their residents,” Anjana Patel, a member of the health-care and life sciences practice in the Newark and New York offices of Epstein Becker Green, said.
Transaction activity in long-term care facilities may take longer to pick up given the increased government scrutiny many are likely to face following the pandemic, Patel said.