GCG’s Q3 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:
- Q3 2021 saw continued gains in some sectors of the Healthcare industry, while other sectors saw slight losses during the quarter. The industry has been led by the Acute Care sector, which has recorded gains of 94.9% over the last 3 years. The Medical Equipment and Assisted Living/Long-Term Care segments have also done well recording gains of 55.9% and 54.2%, respectively, over the last 3 years. The growth in these segments can be attributed to a post-COVID rebound in high-margin elective procedures, implementation of cost-cutting initiatives, and selling off less profitable assets.
- Q3 2021 M&A activity displayed a slight decrease in transaction volume compared to the previous quarter, however, average deal value had a modest increase during the same time span. M&A activity in the sector remains strong as 2021 continues to be a record year for deal activity. The Biotechnology category led transaction activity, accounting for 20.7% of total Healthcare volume. The Healthcare Technology and Healthcare Services sectors were strong in Q3 with 19.6% 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 14.0x EBITDA and 3.3x revenue. One of the strongest sectors in the Healthcare industry was Medical Equipment with an average multiple of 20.4x EBITDA.
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