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Private equity had 2nd-highest year for healthcare deal activity in 2022, report finds

Private equity had its second-best year for healthcare services deal activity in 2022 — 2021 being the best — after firms announced or closed an estimated 863 transactions, according to a Feb. 3 report by market research firm Pitchbook.

Four things to know:

1. The 863 private equity deals in 2022 represent a nearly 15 percent decrease from 2021, but a more than 18 percent increase from 2020, according to the report. 

2. Despite the high number of private equity transactions in 2022, the pace of dealmaking slowed in the fourth quarter due to macroeconomic uncertainty and rising capital costs. Buyers and lenders are more cautious, and the risk of overleveraging a platform is top of mind, according to the report.

3. Researchers expect staffing-related margin pressures, liquidity constraints and a challenging private equity fundraising market to slow deal activity in the first half of 2023, but there may be a rebound in the second half of the year if macroeconomic conditions cool. 

4. Pitchbook has tracked the number of private equity deals in the healthcare services sector over the last six years:

2017: 411
2018: 550
2019: 600
2020: 729
2021: 1,013
2022: 863

Click here to access the Pitchbook report. 

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