M&A Update | Healthcare
Major U.S. indexes The first quarter of 2018 (Q1-2018) showed mixed performance for the broader U.S. equity market, as the S&P and DJIA closed down 1.2 percent and 2.5 percent, respectively, and the NASDAQ closed up 2.3 percent for the quarter. For the 12 months ending March 31, 2018, the S&P, DJIA and NASDAQ closed up 11.8 percent, 16.3 percent and 19.4 percent, respectively. Healthcare relative performance As of March 31, 2018, two of the five healthcare sectors shown below exhibited declines on a trailing 12-month basis. Of the five healthcare sectors shown, the home health and hospice sector achieved the best performance. This sector exhibited stock gains of 35.6 percent, while the S&P 500 index realized an 11.8 percent return for the observed period.
Table 2: Healthcare relative market performance
-30.00% -20.00% -10.00% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
34.7% 35.6%
11.8% 11.7% -8.8% -2.1%
S&P 500 Index (^SPX)
Managed Healthcare Long-Term Care
Home Health and Hospice
Non-Acute Care
Acute Care
Table 3: Indexed market performance by sector
% Change
Median EV/ LTM
Industry Sector
3 Months 12 Months Revenue EBITDA
Home Health and Hospice 21.6%
35.6% 34.7% 11.7% (2.1%) (8.8%)
1.4x 0.6x 1.9x 1.0x 1.2x
18.7x 10.6x 11.7x
Managed Healthcare
36.6%
Non-Acute Care
1.4%
Acute Care
(9.1%) (6.7%)
9.2x
Long-Term Care
10.3x
Source: S&P Capital IQ and Baker Tilly Capital research (April 2018) LTM as of March 31, 2018 EV = Enterprise value
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