Although private equity firms have been active in healthcare services for many years, their participation has grown significantly in the past five. In our newly published report, 2019 Health Care Services Acquisition Report, Twenty-Fifth Edition, we took a look at their recent activities and how they’re moving these markets.
Deal volume created by these firms and their portfolio companies grew 450% between 2014 and 2018, reaching 369 transactions in 2018. PE firms’ share of the combined annual deal count in healthcare services increased to 46% in 2018, from just 14% five years earlier. The data below does not include the Long-Term Care sector.
Spending by these firms and their portfolio companies is less consistent, primarily because financial terms aren’t disclosed in the majority of the transactions. A high was reached in 2017, when $29.4 billion was reported.
Some sectors are more attractive than others, particularly the less capital-intensive ones. In 2018, only 8% of the 83 hospital deals were announced by private equity-backed acquirers. On the other end of the spectrum, 62% of Physician Medical Group and 60% of Behavioral Health Care deals involved a private equity firm or sponsored company.
