Q2 2021 Healthcare Industry Update

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GCG’s Q2 2021 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:

    • Q2 2021 saw continued gains in multiple healthcare industry sectors, while other sectors saw slight losses during the quarter. The industry has been led by the Acute Care sector, which has recorded gains of 106.2% over the last 3 years, almost doubling the S&P 500. The Homecare/Hospice and Medical Equipment segments have also done well recording gains of 74.3% and 61.1%, respectively, over the last 3 years. The growth of these sectors is largely driven by the rising geriatric U.S. population and the increase in disease prevalence and incidences.
    • Q2 2021 M&A activity displayed a slight decrease in transaction volume compared to the previous quarter, however, average deal value increased during the same time span. M&A activity in the sector remains strong as Q2 recorded the second-highest amount of transaction volume over the past year. The Medtech category led transaction activity, accounting for 20.0% of total Healthcare volume. The Healthcare Services and Biotechnology sectors were strong in Q2 with 19.3% and 16.9% of transaction volume, respectively.
    • Based on a representative set of publicly-traded companies in the Healthcare industry, public companies traded at an average multiple of 15.1x EBITDA and 3.7x revenue. Among the sectors, the strongest trading multiples were observed in the Medical Equipment and Homecare/Hospice sectors.

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