GCG’s Q3 2023 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 2023 middle-market M&A deal volume and average deal value retracted from Q2 2023.
• Amid inflation, high interest rates, decline in COVID related revenues, and increased labor costs, Q4 2023 and FY2024 are expected to be highlighted by smaller strategic expansions and cross-sector deals.
• Reportedly, over 1/3 of health system deals cited financial distress as a transaction driver.
• New transparency laws such as New York’s Article 45-A to the Public Health Law that went into effect in August 2023, require healthcare entities (including management service organizations) to disclose “material transactions” at least 30 days in advance. 16 states have enacted or proposed similar legislation including California with a proposed 90-day advance notice.
• Increased scrutiny of private equity roll-ups by DOJ/FTC may hinder deal flow, as the two agencies enhance pre-merger notification requirements.

Click here for the full update.

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