Q3 2022 Healthcare Industry Update

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GCG’s Q3 2022 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 2022 saw modest losses in public equities across the Healthcare landscape that were in line with the broader equity market. Inflation and interest rate concerns continued to persist in the market, however, some Healthcare sectors recorded positive gains in the quarter. The Managed Healthcare sector recorded an average gain of 1.9% in the quarter, substantially outperforming the broader market.
  • Q3 2022 middle-market M&A deal volume remained stable from Q2, while average deal value saw a considerable increase. Q3 2022 deal volume is down 29% compared to Q3 2021, but average deal value remains strong recording its highest level over the past year. The Biotechnology category led transaction activity, accounting for 21.6% of total Healthcare volume.
  • Based on a representative set of publicly traded companies in the Healthcare industry, public companies traded at an average multiple of 12.2x EBITDA and 2.7x revenue in Q3 2022. Additionally, two of the strongest sectors in the Healthcare industry were the Home Care/Hospice and Medical Equipment sectors with an average multiple of 15.8x and 15.3x EBITDA, respectively.

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