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Every quarter, Health Evolution will report on the proposed and finalized mergers and acquisitions in the health care industry that occurred over the preceding three months. If we missed any deals, contact us here. 

Not surprisingly, M&A in health care has seen a slowdown in 2020. But it’s not as bad as analysts may have expected when the pandemic hit. According to a July report from consultancy Kaufman Hall, there were 14 transactions announced in quarter two of 2020. While this represents a slowdown from the prior quarter, with 29 transactions, it is not a significant change year-over-year from Q2 2019, when 19 transactions were announced. Moreover, the authors say the quarter saw one of the highest figures for average size of seller by revenue the consultancy has ever recorded, at more than $800 million.  

The trend has continued during the summer. Here some of the deals that occurred from June to August:  



On June 17, Advocate Aurora Health and Beaumont Health announced their intent to merge and create a health care system that would span across Michigan, Wisconsin and Illinois. The combined entity would form a $17 billion organization, according to the Detroit Free Press. The deal would be an “asset merger of the hospital systems under the control of a single, 15-member board of directors that would have equal representation from the legacy Beaumont, Advocate and Aurora systems.”  

However, the proposed deal hit a snag when Beaumont physicians overwhelmingly rejected the proposed deal and expressed no confidence in corporate leadership. “While many of the potential concerns raised are local hospital specific and unrelated to the proposed partnership, our top priority right now is listening to our physicians, staff and community who we value so greatly,” Beaumont said in response to the concerns from its staff. The two entities are looking for a final decision in the third quarter and would like that to be effective by Jan. 1, 2021.  

Prime Healthcarea multistate health system based in Ontario, California, completed its purchase of St. Francis Medical Centera 384-bed Los Angeles County medical facility, from Verity Health in August. The acquisition, which was first announced in April, was valued at $350 million. It got approval from California Attorney General Xavier Becerra and was finalized on August 17. Prime has committed to invest $47 million in capital improvements and extend offers of employment to nearly all staff. It was chosen as the highest bidder for the bankrupt St. Francis, “based on a significant financial commitment of over $350 million, unique ability to turn around struggling hospitals, history of clinical quality and a commitment to continue the mission of the hospital. 

Sentara Healthcare, based in Norfolk, Virginia, and Cone Health, based in Greensboro, North Carolina, announced an intent to merge on August 12. The combined entity would create an $11.5 billion organization that would span both Virginia and North Carolina. The combined entity would have Sentara’s Howard Kern as the CEO, with Cone CEO Terry Akin staying in North Carolina to serve as president of the Cone Health division. The combined organization is subject to state and federal regulatory review and is anticipated to close in mid-2021. The two entities said it will take up to two years to fully combine and integrate. 

In July, Washington-based health systems, CHI Franciscan and Virginia Mason, along with CommonSpirit Health, the parent company of CHI Franciscan, announced they have signed a Memorandum of Understanding (MOU) to explore combining the two health systems. The new multi-billion-dollar health system would be led by Ketul Patel and Gary Kaplan, MD as co-CEOs and each organization would receive an equal number of board seats. Across the state of Washington, the combined organization would operate 12 hospitals and more than 250 sites of care.  

Others: Mercy Health Lorain and Akron Children’s Hospital announced an affiliation deal, which calls for Akron Children’s to assume operations at three existing Mercy Health pediatric primary care offices. The Department of Justice sued to block Geisinger Health’s partial acquisition of its close rival, Evangelical Community Hospital in Central Pennsylvania. Novant Health, UNC Health and UNC School of Medicine signed a letter of intent to create collaborative medical education and clinical services at New Hanover Regional Medical Center. 



Molina Healthcare, a managed care company based in Long Beach, California, announced its closed on acquiring Passport Health’s Medicaid business for $20 million. The deal was announced in July. “The acquisition of Passport allows Molina to enhance operational readiness and promote continuity of care for members in advance of Molina’s new contract award in the Kentucky Medicaid market,” Molina said in a statement regarding the deal. The contract for the new agreement begins on Jan. 1, 2021. Molina expects to recover the purchase price from positive cash flow within the first year following the acquisition 

UnitedHealthcare’s Optum signed a deal with Boulder Community Health in Colorado, enabling the hospital to stay independent. As part of the undisclosed deal, Optum will provide BCH with resources and scale, including managing a broad set of essential functions spanning data and analytics, revenue cycle management and care coordination. “We have heard from our community, our physicians and our employees that remaining independent is critical to keeping health care decision-making local and in the best interest of the communities we serve,” said Jeff Morgan, chair of the Boulder Community Health’s Board of Directors. 

Others: A Delaware Chancery Court ruled that neither Anthem nor Cigna was entitled to recover any damages after they failed to complete a proposed $54 billion merger. “Neither side can recover from the other. Each must deal independently with the consequences of their costly and ill-fated attempt to merge,” the ruling read. On July 6, Anthem’s IngenioRx pharmacy benefit manager announced its acquiring ZipDrug, a data-driven pharmacy management company. 


Life Sciences 

According to a report from PwC, deals in life sciences have taken the biggest hit in the COVID-19 pandemic. Deals in pharma were the lowest since Q1 2018, PwC reports, likely due to companies digesting the large volume of deals completed in recent years as they plan their next strategic moves. The value of pharma deals shot down 56% between the second half of 2019 and the first half of 2020. 

In August, a Delaware bankruptcy court approved the sale of Proteus Digital Health to Otsuka Pharmaceuticals (based in Rockville, Maryland in the U.S.) for $15 million. Proteus, which developed a tiny sensor that could be embedded in pills to track adherence, filed for bankruptcy in June and was facing a huge cash crunch after it failed to close a $100 million funding round. Otsuka was the only bidder for the company, but a few stakeholders in Proteus, representing Novartis and two investment firms, called for increased scrutiny of the deal, according to MedCityNews. They said the process included a timeline that did not allow for other bidders. The Delaware court overruled the objection, allowing for the acquisition to close.  

Takeda, the pharma giant based in Japan (U.S. headquarters are in Cambridge, Massachusetts) made a couple of moves over the summer to help pay down its debt. In June, the company sold 18 over-the-counter and prescription drugs marketed in the Asia-Pacific region to South Korea’s Celltrion for $278 million. In August, Takeda unveiled a deal to send its Japanese consumer health business to Blackstone Group for $2.3 billion. The latter deal was expected to close by March 31, 2021. The deals have been made to achieve Takeda’s $10 billion selloff goal, which came from its $59 billion takeover of Shire in 2019. 




In what was the flashiest deal of the summer, Teladoc Health and Livongo agreed to merge for $18.5 billion. The merger combines Teladoc, a virtual care company with Livongo, which has grown rapidly through its remote monitoring and chronic care management tech. As Health Evolution reported, one CEO sees it as a harbinger of things to come, as the country combats a deadly pandemic that has forced a transition to care being delivered virtually.     

Health Catalyst, an analytics company based in Salt Lake City, Utah, struck two deals over the summer. First, it acquired Madison, Wisconsin-based Healthfinch for $40 million in July. Within Health Catalyst’s analytics application portfolio, Healthfinch will be a new application suite category called EMR Embedded Insights and its refills, care gaps closure, and visit planning applications will continue to be available in the original configuration. In August, Health Catalyst agreed to acquire Vitalware for $120 million. Vitalware offers revenue workflow optimization and analytics SaaS technology solutions to healthcare organizations. “Vitalware provides us with another analytics application, offering us a strategic anchor technology in the revenue space, expanding our CFO value proposition,” Health Catalyst CEO Dan Burton said on an earnings call.  

EHR company Cerner sold its revenue cycle management arm, RevWorks, to R1, based in Chicago, for $30 million in early June. The deal was finalized in late August. As part of the deal, Cerner said it will extend R1’s comprehensive revenue cycle capabilities and expertise to Cerner clients and new prospects.  

Others:  SOC Telemed, formerly Specialists on Call, announced its intent to get listed on the Nasdaq stock exchange by aligning with Healthcare Merger Corporation, a special purpose acquisition company. The transaction implies an initial enterprise value for SOC of approximately $720 million. Continuing its foray into health care, Walmart announced in June that it was acquiring digital medication management company CareZone’s tech platform.