A new study conducted by PCE Companies reveals the effects and trends that are surfacing in healthcare M&A during the current pandemic. Covid-19 has profoundly changed the way many companies are conducting business, leading to a period of uncertainty as both investment bankers and business leaders learn to adapt to the new environment. Despite the current need for both healthcare services and medical equipment, there has been an immediate reduction in transaction volume compared to the previous year.
- Between March 22 and June 13, healthcare transaction volumes have declined by 46%
- 86% of these closed transaction were handled by strategic buyers.
- Healthcare service companies only comprised 20% of the 201 completed M&A transactions during this period (As opposed to 30% in 2019)
While there may be lower transaction volume overall during this time, it is clear that medical equipment companies have been better poised to take advantage of the current market and successfully close deals.
Moving forward, we expect the market to be more competitive as lenders tighten up credit lines and companies take on defensive strategies. That being said, companies that are able to deliver financially will have passed the definitive stress test of the decade and may be able to command premium prices from buyers.
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2020