Private equity (PE) investment has continued to play a
substantial role in the healthcare M&A market. In the second
quarter of 2024, there were 186 deals completed by PE companies or
their sponsored companies (PE buyers, collectively), or
approximately 38% of all the 496 announced healthcare deals,
according to new data captured in the LevinPro HC database. This is
a 24% increase from the first quarter of 2024 when 150 acquisitions
from PE buyers were announced. Activity in Q2:24 represents a 17%
decrease from Q2:23 when 224 PE buyer transactions were
reported.
NEW
CANAAN, Conn., July 16,
2024 /PRNewswire-PRWeb/ -- Private equity (PE)
investment has continued to play a substantial role in the
healthcare M&A market. In the second quarter of 2024, there
were 186 deals completed by PE companies or their sponsored
companies (PE buyers, collectively), or approximately 38% of all
the 496 announced healthcare deals, according to new data captured
in the LevinPro HC database. This is a 24% increase from the first
quarter of 2024 when 150 acquisitions from PE buyers were
announced. Activity in Q2:24 represents a 17% decrease from Q2:23
when 224 PE buyer transactions were reported.
"Private equity remains a dominant force in
the healthcare investment space. When market conditions improve, we
expect a flurry of activity in the future."
In Q2:24, 10 transactions with a PE buyer had a disclosed price.
The ten deals totaled more than $5.49
billion in announced spending. The deal with the largest
purchase price was Thomas H. Lee
Partner, L.P.'s acquisition of Agiliti, Inc., which is a
medical equipment company, and was valued at $2.5 billion. The second largest transaction in
terms of purchase price was the acquisition of Model N, a revenue
cycle management organization, by Vista Equity Partners for
$1.25 billion.
Physician Medical Groups (PMG) drew the highest level of
activity from PE buyers with 77 deals, accounting for nearly 41% of
activity from PE. This is a slight increase from Q1:24 when PE
groups and their portfolio companies completed 72 PMG transactions
and a minor increase from Q4:23 when PE firms and/or their
portfolio companies completed 75 PMG deals. This indicates that
PE's involvement in the PMG space is stable, albeit growing at a
slow rate.
In the PMG sector, PE groups targeted dental practices in 57% of
the acquisitions, with 44 transactions. This is on par with Q1:24
when there were 45 dental transactions completed by a PE buyer. The
second most popular PMG specialty for investors was dermatology,
with five deals. In the first quarter of 2024, there were four
acquisitions targeting dermatology practices.
The most active PE-backed buyer was MB2 Dental Solutions, a
portfolio company of Charlesbank Capital Partners, with 23 deals in
Q2:24. This marks a small increase from the first quarter of the
year when MB2 Dental announced 20 transactions. The second most
active PE buyer was Specialized Dental Partners (SDP), backed by
Quad-C Management, Inc. which reported eight transactions.
In addition to PMGs, there was a significant amount of PE
involvement in the eHealth space, with 24 deals reported during the
second quarter of 2024. This is a minor increase from Q1:24 when 20
transactions were announced, yet a decrease from Q2:23 when 28
eHealth acquisitions were reported. The most active eHealth
subsector in Q2:24 was medical practice management software with
eight completed transactions. The most active eHealth buyer was
Serent Capital, which completed two deals; it purchased Medical
Informatics Engineering and Traumasoft, both for undisclosed
prices.
In Q2:24, there were 12 PE-backed Home Health & Hospice
transactions, 10 Medical Devices deals, four Rehabilitation
acquisitions and three Pharmaceutical deals.
"It's clear industry headwinds and regulatory pressures are
forcing private investors to slow down M&A activity," said
Dylan Sammut, Editor of Healthcare
at LevinPro HC, which publishes the data. "But even so, private
equity remains a dominant force in the healthcare investment space.
When market conditions improve, we expect a flurry of activity in
the future."
All quarterly results are published in The Health Care M&A
Report, which is part of LevinPro HC, a research intelligence
platform published by Irving Levin Associates, LLC. For
information, or to order the reports, call 800-248-1668. Irving
Levin Associates is celebrating more than 70 years of delivering
exclusive M&A intelligence to its sophisticated audience of
seniors housing and healthcare investors. The company was
established in 1948 and has offices in New Canaan, Connecticut and North Bethesda, Maryland. The company
publishes research reports and newsletters and maintains databases
on the healthcare and senior housing M&A markets.
Media Contact
Dylan Sammut, Irving Levin
Associates, 203-846-6800, sammut@levinassociates.com,
www.levinassociates.com
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SOURCE Irving Levin Associates