By Kristofer Blohm, Managing Director, Kaufman Hall & Associates
David De Simone, JD, MHL, CPHRM
John R. Washlick, Shareholder, Buchanan Ingersoll & Rooney
Private equity interest in U.S. healthcare companies remains significant in 2023. However, in the wake of the Covid-19 pandemic and facing economic uncertainty, it’s safe to say that some investors are cautious and being prudent with capital. Deals are not what they used to be: a shift in objectives on the buy side, new players on the sell side, changing regulations at the state level, and increased scrutiny from federal regulators have made traditional deals more challenging.
Still, plenty of opportunity remains. According to industry tracker PitchBook, in 2022, PE firms invested in more than 1,300 health care deals, valued at $111.7 billion. That is a decrease in the PE investment of $216.7 billion in more than 1,400 deals that we saw in 2021, but more than double the 594 deals, valued at $66.6 billion, recorded in 2015.
As technology creates an increasing number of care options for patients, more healthcare providers are signaling they’re open to combining forces with private equity interest in a way that allows them to best serve the general population. Buyouts, strategic partnerships, and other types of transactions are emerging between PE firms and health care providers that demonstrate both sides can accomplish their business goals. Read more.
