Health care deals are down to start 2019, but the outlook is good, largely due to of the amount of dry powder on the sidelines, a recent panel of private equity professionals noted earlier this month.
The panel discussion, entitled “Financing the Deal,” was hosted by The Nashville Health Care Council, and featured representatives from four private equity firms specializing in health care. It was moderated by Tom Wylly, senior partner with Brentwood Capital Advisors, which focuses on transactions in the health care technology space.
The pending 2020 presidential election is likely to be another catalyst for deal activity, panelists said, noting that many sellers may be driven to the market prior to the election, which will likely portend a period of uncertainty.
In the first quarter of 2019, private equity firms raised more than $40 billion in fresh capital; meanwhile more than $1 trillion is available to invest. So called tuck-in acquisitions dominated the first quarter, representing 72 percent of the deals, rather than platform acquisitions. The reason, according to the panel, was the high valuations being demanded by sellers who have proven their ability to integrate platform acquisitions to drive growth.
The pending 2020 presidential election is likely to be another catalyst for deal activity, panelists said, noting that many sellers may be driven to the market prior to the election, which will likely portend a period of uncertainty. The panel expected that the deal environment in 2020 would be relatively quiet.
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