Distressed assets in behavioral health are more likely to come to market in 2024, according to several dealmaking professionals.
This is bad news for buyers who acquired assets at the top of the market three to five years ago. Multiples are down from atmospheric highs, leaving it unlikely that investors will make exits at their desired prices. However, more assets coming to market at a bad time to sell may dislodge the behavioral health dealmaking logjam.
“It’s been a bit of a perfect storm with aggressive wage inflation, increases in costs of benefits, and a rapid rise in interest expenses,” John Hennegan, founding partner of Shore Capital Partners, told Behavioral Health Business. “Some private equity firms, and as importantly, some executives, will say, ‘It’s a really long road from here to get to an outcome that we’re all excited about … Let’s lick our wounds and go to market right now.’” Read more.
