Q4 2019 Healthcare M&A Update

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GCG’s Q4 2019 Healthcare Industry Update provides an overview of the latest trends in the sector, including recent performance, valuation multiples and the state of the middle-market M&A environment.

Key findings include the following:

    • Q4 2019 saw mostly positive returns in the Healthcare industry and across the broader U.S. equity markets from the previous quarter. Some sectors over others in the Healthcare industry exhibited strong performance on a 12-month basis ending December 31, 2019. The industry has been led by the Homecare/Hospice and Acute Care segments, both of which outperformed the S&P 500, with stock gains of 158.3% and 95.7%, respectively, over the past three years.
    • Q4 2019 M&A activity displayed a slight increase in transaction values since Q3 2019 in the Healthcare sector. While transaction volume fell from the previous quarter, transaction values increased roughly 4%. Strategic buyers continue to dominate overall deal activity and have sought acquisitions to offset slowing organic growth and to diversify their offerings. The Biotechnology sector led activity, accounting for 19.5% of total Healthcare transaction volume. The Healthcare Services sector proved to be an attractive target as well with 16.2% of deal flow.
    • Based on a representative set of publicly traded companies in the Healthcare industry, public companies traded at an average multiple of 17.0x EBITDA and 3.1x revenue. Among the sectors, the strongest trading multiples were observed in the Homecare/Hospice and Biotechnology sectors.

Click here for the full update.


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