![]() ![]() The addition of Pasadena, Calif.-based Huntington would add another highly regarded hospital to the Cedars-Sinai family and further expand the health system’s ability to reach patients in the Los Angeles area. This is down from 34 deals in Q1 2020 as consolidation efforts have slowed and acquirers continue to be selective within the subsector.Īn announced deal worth highlighting in March is Cedars-Sinai Health System’s proposed affiliation with Huntington Hospital. There were eight hospital and health system transactions announced or closed in March, for a total of 22 transaction during Q1. ![]() Also notable are five deals in each of eyecare and orthopedics, plus the remainder of the activity covering seven other different specialties. In regard to the many other physician sector deals in March, 20 involved primary care practices and centers, half of the month’s 40 transactions. The investment represents InTandem’s first venture into the women’s health space, where the firm intends to expand upon the platform San Diego Fertility has built as the business branches outside of Southern California. ![]() One transaction of note in March is InTandem Capital’s investment in San Diego Fertility Center. In particular, investor interest for fertility services providers has been strong, driven by factors such as a highly fragmented provider landscape, an increasing average age of women at childbirth, and an expansion of insurance coverage for infertility-related services, which reduces patients’ out of pocket costs for expensive services and provides access to a greater patient population. The women’s health subsector, including OB/GYN and fertility services, has experienced continued interest from both strategic and financial buyers. for purchasing malpractice insurance, health benefits, expensive medications & supplies, etc.) (iii) improved managed-care contracting and (iv) professionalized practice management and corporate infrastructure. Physician groups are seeing the substantial benefits of being part of larger organizations for many reasons, such as: (i) access to capital for practice expansion including for new offices, physician recruitment, and expanded ancillary services (ii) economies of scale to reduce operating costs and increase profits (e.g. At this current pace, the sector could see upwards of 400 deals this year as rising patient volumes and various favorable industry tailwinds have continued to attract investors to the subsector a year after the onset of Covid-19. Totals for Q1 (112) are up more than 80% from Q1 2020 (62) and the second highest volume of all sectors year-to-date. Physician practices and services capped off another active month with 40 deals announced or closed in March. Additionally, for the remainder of the year, life sciences companies are expected to continue innovation on next-generation cell and gene therapies, further increasing competition and interest in the sector. Interest in life sciences transactions is likely to remain high through 2021, as current Covid-19 vaccine distribution continues, revised vaccines or boosters are developed to address emerging virus variants, and new therapeutics are approved. ![]() The sector has 126 deals year-to-date, up 48% from Q1 2020. Life science and pharmaceutical (57) had the highest volume of announced or closed deals in March and the highest monthly volume of any sector since tracking began. However, some possible health-care system reforms, such as changes to Medicare eligibility or drug pricing reforms, could have unpredictable impacts on sectors of the health-care industry. In addition, congressional efforts to improve infrastructure and increase jobs could fuel further transaction activity. This record pace is unlikely to continue for the entire year, but we expect the investment outlook to remain strong for the health-care and life sciences sectors as the country continues to recover from the Covid-19 pandemic, patients and consumers more fully resume and increase use of preventive and routine care delayed due to health concerns, and the economy continues to recover. Topping the list was the life science and pharmaceutical industry, as work involving the Covid-19 vaccine continues. The volume of announced and closed health-care industry deals in March (276) was the highest of any month so far in 2021, bringing total deal volume in the first quarter of the year to 723, up 52% from the first quarter in 2020 (476). ![]()
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