United States

Q3 2017 Health Care Industry Spotlight


Q3 in review: Health care deals data, analysis and more

In the wake of the recent dramatic policy shift by the current U.S. administration, the health care industry faces an uncertain future. The decision to cease reimbursing insurance companies for reducing out-of-pocket costs for poorer customers could destabilize health insurance markets and affect the population of potential customers. Even with the uncertainty, there's still an enormous amount of money sitting on the sidelines and there are opportunities for private equity (PE) firms to source deals in sectors less susceptible to policy changes, such as behavioral health, physical therapy and dental practices.

As is a trend across all industries, the law of supply and demand has taken a toll on health care mergers and acquisitions (M&A) activity. The volume of completed M&A transactions has been declining on a quarterly basis, while the average transaction size remains quite high and the median hits an unprecedented high of $90 million in the third quarter. It’s clear the supply of worthwhile targets remains lower than in years past. Hence the increase in transaction sizes for the remaining quality assets in the market without any significant shift in deal volume. 

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