Mergers and acquisitions activity slowed by 9% in the first quarter compared with the fourth quarter of 2021, according to data released Wednesday from LevinPro.
The industry saw 127 deals in the first quarter, down from 140 transactions in the final quarter of 2021. Still, the data show recovery from a year ago. In the first quarter of 2021, 84 mergers and acquisitions took place, whereas the first quarter of 2022 saw 51% more activity. M&A activity within the long-term care industry had dipped to 107 deals in the third quarter of 2021, a 4% decline when compared with the 111 transactions during the second quarter of that year.
Additional findings show that $3.87 billion was spent on first-quarter transactions this year, a drop of 2% from the previous quarter’s total of $3.94 billion.
The findings are not surprising; McKnight’s Long-term Care News previously reported survey results showing that inflation could stunt M&A activity this year.
Portfolio deals are on the rise, according to the data. There were 35 total portfolio deals that had at least three properties per deal announced in the first quarter of 2022, LevinPro reported; the amount was more than had occurred in any quarter since before the pandemic.
Additionally, there were 30 portfolio deals in the fourth quarter of 2021. With Welltower’s partnership with StoryPoint Senior Living, the real estate investment trust acquired 33 senior living communities in Michigan, Ohio and Tennessee for a total of $548 million, representing the largest portfolio of properties sold in the quarter.
Private real estate investment firms and REITs accounted for 34% of the transactions announced during the first quarter. Private equity firms themselves made up 13% of the quarter’s buyers, according to LevinPro; 30% of those deals were for majority skilled nursing properties, and the remainder were senior living deals.
