In the wake of consolidation, players as large as Humana (HUM) have also been considered either a buyer or a takeover target.
Mergers between hospital and outpatient networks such as Tenet and Vanguard may be among the least heralded pieces of industry consolidation.
According to an August 2012 interview with Marc Cabrera, head of the healthcare investment banking practice at Morgan Joseph TriArtisan, physician practices and hospital networks have been undergoing a rapid consolidation, however, such mergers often aren't market moving news.Recent deals like dialysis specialist DaVita's (DVA) $4.42 billion acquisition of privately held physician practice HealthCare Partners and health-insurer Humana's (HUM) acquisition of hospital chain Concentra in 2010 highlight how healthcare sector players are scaling their operations, noted Cabrera in a July 2012 interview with TheStreet. Tenet's deal for Vanguard, for instance, may just create a twist in the way hospital network consolidation plays out. Health Management Associates (HMA) had been considered a target of Tenet, however, some analysts have speculated the company's largest shareholder Glenview Capital Management could push for a merger with Community Health Systems (CYH). Glenview, which has staked billions on investments in healthcare providers and hospitals, is a top shareholder in Tenet Healthcare with a near 10% stake, according to May 31 SEC filings. Bottom Line: Tenet's deal for Vanguard indicates a continued sellers' market as major healthcare industry players position for 'Obamacare.' Expect continued consolidation among healthcare providers and hospitals. -- Written by Antoine Gara in New York Follow @antoinegara
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV