Summary
Healthcare PE Dealmaking Trends in 2023
Healthcare PE Dealmaking Trends in 2023
Introduction
In this episode, Scott Becker talks with John Meindl and Taryn Nasr, Directors in VMG Health’s Valuation & Transaction Advisory Division. The three leaders discuss the recent macro and micro trends for Healthcare PE Dealmaking and the outlook for dealmaking in 2023.
Sponsored by VMG Health
This episode is sponsored by VMG Health.
Trends in Private Equity Investing in Healthcare
John Mindel and Tarn Nas, directors of Vmg G Health, discussed trends in private equity investing in healthcare. They noted that the trend has shifted to smaller tuck-ins, but there is still a high demand for platform deals due to limited supply. Private equity firms are relying more on direct lenders and private capital markets to finance deals, as well as increasing the amount of equity they are putting up. Finally, sellers are becoming reticent to go to market, leading to bidding wars on first-in-class assets.
Funding Challenges and Opportunities
Private equity firms are having to come up with creative ways to fund deals due to banks capping out at 5-6x EBITDA. Healthcare is a recession-resistant industry and investments in it are increasing due to technology advancements, its position as a percent of GDP, and its risk versus reward value. Sub-industries that have seen increased PE interest include ophthalmology, orthopedic practices, dental practices, urgent care, oncology, and behavioral health.
Private Equity Investments in Behavioral Health
Private equity investments in the behavioral health space are usually PE or joint venture transactions, with PE leading the way. For those who are new to dealing with private equity, they should do a quality of earnings analysis on their business and familiarize themselves with recent transactions and typical investment periods.
Note: This is an AI generated transcript, not edited by a staff writer and is solely intended for educational purposes. If you have any questions/concerns, reach out to podcasts@beckershealthcare.com
This episode aired on 05/11/2023 and can be listened here.
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