Q1 2019 Healthcare M&A Update

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GCG’s Q1 2019 Healthcare M&A Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples and the state of the overall middle-market M&A environment.

Key findings include the following:

    • Q1 2019 saw some recovery in the Healthcare industry and the broader U.S. equity market from the previous quarter. On a 3-year period ending March 31, the S&P, DJI, and Nasdaq indices were up 36.7%, 48.4%, and 32.9%, respectively.
    • Q1 2019 M&A activity displayed a slight decrease in transaction values since Q4 2018 in the Healthcare sector. However, we’re seeing continued optimism in the sector moving forward as transaction volume saw a 56% increase year-over-year. Strategic buyers continue to dominate overall deal activity, seeking to offset slow organic growth and diversify their offerings. The Pharmaceuticals category led activity, accounting for  nearly 18% of total healthcare transaction volume, with Biotechnology following closely behind at about 16% of deal flow.
    • Most of the Healthcare industry exhibited strong public market performance on a 12-month basis, with certain segments performing stronger than others. The industry has been led by the Managed Healthcare and Home Care/Hospice segments, both of which outperformed the S&P 500, with stock gains of 82.6% and 118.5%, respectively, over the past three years.
    • Based on publicly traded companies in the Healthcare industry, the comparable public companies traded at an average multiple of 15.9x EBITDA. Among the sectors, the strongest trading multiples observed were in the Medical Equipment and Biotechnology sectors.


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