Firm sees strong market potential for healthcare transactions in 2008
Memphis, Tenn. (Feb. 4, 2008) — Morgan Keegan & Company, Inc., through its Shattuck Hammond Partners division, announced or completed 12 healthcare merger and acquisition transactions during the past six months, with a combined value of approximately $2.1 billion.
Michael B. Hammond, managing director at Shattuck Hammond commented, “We continue to experience strong M&A activity in the healthcare service sector, particularly for ‘non-mega’ transactions. From what we’re seeing so far, the turmoil in the debt markets has generally not materially impacted transactions under $500 million. Based on our transaction pipeline and overall view of the healthcare services industry, as well as the healthcare M&A market, we believe this trend will continue in 2008.”
According to Hammond, other contributing factors to the continuing strength of the healthcare service sector M&A market include:
- Strong interest in acquiring healthcare payers and providers among both strategic and financial buyers
- Available credit for strategic and financial buyers for small and midsize deals
- Continued growth in healthcare spending, which currently represents approximately 16 percent of GDP
- The aging population which helps drive the growth in healthcare spending and overall consumer demand for healthcare services
- A continued trend of private equity as a growing force relative to strategic acquirers in M&A in general and healthcare M&A in particular. This is due to the large and growing amounts of univested cash that must be put to work or risk investors taking back funding, as well as a steady increase in valuation multiples that private equity firms are willing to pay.
Shattuck Hammond was acquired by Morgan Keegan in June 2007.
Robert A. Baird, executive managing director at Morgan Keegan and co-head of the firm’s investment banking group said, “The merging of the companies has enabled Shattuck Hammond to broaden its scope of investment banking services to its healthcare industry clients. In addition, the expertise Shattuck Hammond provides to Morgan Keegan’s healthcare offering serves as a catalyst to grow the firm’s healthcare services practice.”
Healthcare related transactions announced or completed by Shattuck Hammond during the past six months include:
- The sale of the approximately 22,700 member Medicare Advantage business of Health Partners of Philadelphia to Bravo Health, a private equity backed Medicare managed care company
- The recapitalization of the shareholder base of TractManager, the nation’s leading contract management services organization
- The pending sale of SafeGuard Health Enterprises, a private equity backed dental and vision benefit company with approximately 1.8 million members primarily located in California, Florida and Texas, to MetLife
- The sale of the Florida operations of Home Health Corp. of America to AseraCare Home Health, part of the Golden Living family of companies (formerly known as Beverly Enterprises)
- The sale of East Wood Hills, a continuing care retirement community, to Watermark Communities and Fremont Realty Capital
- The joint venture between The Baptist Health System of East Tennessee and St. Mary’s Health System
- The $414 million acquisition of MQ Associates by North Carolina-based Novant Health, a not-for-profit health system. MQ Associates is the holding company of MedQuest, a private equity backed outpatient diagnostic imaging company with 91 centers across 13 states
- The pending sale of Unison Health Plans to AmeriChoice, a UnitedHealth Group company. Unison is a leader in public sector health plans, serving more than 370,000 members and 28,000 providers in five states.
Shattuck Hammond Partners has completed in the last ten years more than 160 merger and acquisitions transactions totaling more than $12 billion in enterprise value, and has served as underwriter, placement agent, financial advisor or bid agent on capital markets transactions totaling more than $13.8 billion.
About Morgan Keegan & Company, Inc.
Morgan Keegan, one of the nation’s largest regional full-service brokerage and investment banking firms, is the securities brokerage subsidiary of Regions Financial Corporation (NYSE: RF). Headquartered in Memphis, Tennessee, Morgan Keegan has over 4,000 employees providing services in some 400 offices.
More than 170 investment banking professionals provide services to multiple industries through 24 banking offices in 14 states, including the 50-person Shattuck Hammond division staff with offices in New York, Chicago, Atlanta, Dallas and San Francisco. Additional information about Morgan Keegan and Shattuck Hammond is available at www.morgankeegan.com and www.shattuckhammond.com.
About Regions
Regions Financial Corporation is a member of the S&P Index and Forbes Magazine’s “platinum 400” list of America’s best big companies. With nearly $138 billion in assets, Regions is one of the nation’s largest full-service providers of consumer and commercial banking, trust, securities brokerage, mortgage and insurance products and services. Regions serves customers in 16 states across the South, Midwest and Texas, and through its subsidiary, Regions Bank, operates some 2,000 banking offices and more than 2,600 ATMs. Its investment and securities brokerage, trust and asset management division, Morgan Keegan & Company Inc., provides services from over 400 offices. Additional information about Regions and its full line of products and services can be found at www.regions.com.
Contact:
Melinda Rutland
Marketing Coordinator, Fixed Income Banking
Morgan Keegan & Company, Inc.
901/531-3259
melinda.rutland@morgankeegan.com
