Q4 2021 Healthcare Industry Update

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GCG’s Q4 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:

    • Q4 2021 saw considerable gains in most sectors of the Healthcare industry, while a few sectors saw slight losses during the quarter. The broader U.S. equity market recorded moderate gains as the major indices tested record highs, although inflation concerns and the introduction of the Omicron variant led to some volatility in prices. The industry has been led by the Acute Care sector, which has recorded gains of 123.3% over the last 3 years. The Managed Healthcare sector also showed strong performance in Q4, recording an average increase of 19.6% in share price.
    • Q4 2021 M&A activity displayed a modest decrease in transaction volume compared to the previous quarter, however, average deal value stayed in line with previous quarters. M&A activity in the sector remains strong with 2021 ending as a historic year for M&A activity. The Healthcare Services category led transaction activity, accounting for 20.1% of total Healthcare volume. The Biotechnology and Healthcare Technology sectors were also strong in Q4 with 18.2% and 17.3% 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 14.4x EBITDA and 3.4x revenue. Additionally, one of the strongest sectors in the Healthcare industry was Medical Equipment with a median multiple of 20.2x EBITDA.

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