Axial Healthcare Whitepaper Takes You Beyond the “Mega Deals,” while Business Services Whitepaper Explores Active and Emerging Sectors Likely to Drive Future M&A Activity
In a detailed whitepaper recently released by Axial, author Karen Sibayan cites data from SDR Ventures showing 2015 Healthcare M&A deal volume on pace with 2014, and invested capital set to triple the amount invested last year.
As the whitepaper states, “This healthy pipeline is spurred by various factors. The most prominent of these is the Affordable Care Act (ACA), the landmark legislation that has expanded health coverage to millions of Americans.”
The impact of the ACA for M&A activity: “A jump-ball” effect where “smart players and money are chasing after growing areas,” states SDR Ventures Principal Chris Bouck in the whitepaper. “Investment bankers and other M&A players are now at the center of industry consolidation and are using their expertise to help companies take advantage of deal opportunities presented by the regulatory changes,” writes Sibayan.
Specific hot healthcare sectors include service areas that drive cost out of the system, such as specialized practices, urgent care, outpatient services and ambulatory care, according to Bouck. Additionally, states Bouck, physician groups have become hot targets, particularly as roll-ups and consolidations for private equity.
With the fierce competition has come elevated valuations, with EBITDA multiples reaching 12x. But as of yet, valuations haven’t created a sizable roadblock to getting deals done. “Buyers are looking for fast-growth and profitable companies right now, and we haven’t seen this being a problem in getting deals done,” Bouck says.
To download the free Axial whitepaper, “Wealth in Health: The Current State of Healthcare M&A,” follow this link.