Long-term care M and A declined 3 percent in second quarter but still is elevated from 2021

Mergers and acquisitions in long-term care declined 3% in the second quarter from the first, according to data released this month by LevinPro LTC. 

There were 135 new deals in the second quarter, compared with 139 transactions in the previous quarter. Even so, this amount is 19% higher than the 113 deals made public in the second quarter of 2021, the company said. 

“After the two quarters of the strongest dealmaking we have ever seen at the end of 2021 and the start of 2022, M&A activity remained at an elevated level in the second quarter,” LevinPro’s Ben Swett said. “Pandemic fatigue from operators, owners and sometimes their capital providers has prompted many property sales, which was helped by steady occupancy growth across the industry, allowing buyers to better model future performance.”

The industry saw 52 transactions announced in June, preceded by 34 in May and 49 in April. Skilled nursing made up only a third of the M&A activity overall in the quarter. Skilled nursing transactions picked up at the end of the quarter, in June, however, accounting for 40% of the transactions that month. 

The 135 deals in the second quarter involved 332 properties. Thirty-six portfolio deals that had at least three properties per deal were announced in the quarter, which is almost flat from 35 such portfolio deals in the previous quarter. 

Even with a decrease in the number of transactions, the second-quarter total of properties affected is higher than any quarter since before the pandemic, according to LevinPro LTC. Private owner/operators accounted for a third of transactions, followed by private real estate investment firms (19%) and real estate investment trusts (10%).

Several companies made multiple acquisitions during the quarter: Welltower (five), Lloyd Jones (three), National Health Investors (three), Chicago Pacific Founders (two), Elevation Financial Group (two), Trustwell Living (two) and Care Property Invest (a European REIT, with two deals). 

“Private owner/operators are becoming the most active group of buyers of senior care properties,” Swett said. “They are looking to build scale and efficiencies across a regional presence while remaining nimble enough to deal with labor and occupancy issues across their portfolios.”