PE Activity in Healthcare: Focus on Behavioral Health
July 29, 2015
PitchBook Dealmakers Column
With the U.S. Supreme Court's recent decision to uphold healthcare coverage for millions of Americans, private equity investment in the industry may regain some of the steam it lost in the first half of 2015, when the industry experienced a slowdown in the number of completed deals. Deal value already began to resurge slightly in Q2 2015, with total capital invested reaching $5.64 billion, compared to $3.03 billion and $3.7 billion, respectively, in the trailing two quarters.
"While the frequency of transactions has tailed off in recent months, the size of deals has started to increase, as large industry players come together to share risk and realize operational efficiencies," said Patrick Pilch, managing director and Healthcare Advisory practice leader with The BDO Center for Healthcare Excellence & Innovation. "Of private equity fund managers already invested in healthcare, we're seeing many focus on a 'buy and build' strategy, turning to joint ventures and organic growth opportunities that may not be reflected in deal count figures to increase the value of their investments."
One area that is particularly attractive for private equity sponsors in today's investment environment is behavioral healthcare. In the past decade, several important pieces of legislation have passed, increasing the number of people covered by insurance faster than the availability of services to treat them. This dynamic is creating a market ripe for growth and consolidation.
Read BDO's full report on PE deal activity in healthcare, powered by PitchBook, to learn more about investment opportunities in behavioral healthcare. Get access by clicking here.
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