Q4 2017 Health Care Industry Spotlight
INSIGHT ARTICLE |
- 2016 and 2017 see increased volume in mergers and acquisitions (M&A) in pure-play healthcare technology systems, although not as much as one may expect just yet.
- Significant deal value—propped up by outliers—suggests cash-rich acquirers and avid bidding for top assets.
- Consolidation in key niches still a driving trend, requiring close focus from key players, especially on the part of private equity (PE).
- Macro factors such as aging populations, evolving regulations and advances in key technologies affecting both consumer interfaces and back-office functions will continue to foment consolidation.
Consolidation and competition will continue to be primary characteristics across the entire health care market. Complicated dynamics related to pricey valuations will continue to prolong transaction durations in the market overall for buyers of all kinds, from PE investors to strategic acquirers. A few outliers will still emerge, however, as some acquirers look to tout their swifter closing times as an added attraction. PE dry powder will bolster bidding prices amid the health care middle market, while continued high costs and potential negative impacts to patient populations will exert pressure upon smaller health care providers.
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A year in review: Health care industry
Regulatory uncertainty coupled with high valuations continue to stymie the overall volume of health care dealmaking.
Health care M&A activity continues its downward trend, but an uptick in technology M&A points to an interest in industry-specific software.
With dealmaking characterized by large transactions amid slowing volume, health care remains an attractive yet challenging prospect.