Report

Healthcare remains attractive for M&A

There is a great deal of investor interest in the healthcare market as wider economic issues are offset by an increase in demand for healthcare assets.

Coupled with the growing profile of social care funding, this has led to health and social care assets appealing to low return, longer term investors such as  real estate investment trusts (REITS) and infrastructure funds.

However, pockets of the market are still challenged. Key pressures include:

  • continued pressure on government funded social care contracts
  • increased Care Quality Commission regulation
  • recruitment and retention of staff
  • consequences of Brexit for the healthcare sector.

Specialist care

Investors are spotting opportunities in specialist care’s innovative care pathways, highly skilled staff and consistent customer base. For example,; BC Partners’ investment in the specialist care assets of The Priory House has gone from strength to strength via a buy and build strategy.

Retail healthcare

Elsewhere in the market, retail healthcare continues to be an area of focus for investors; particularly dental and veterinary. In the veterinary sector, Linnaeus Group was acquired by Mars Petcare’s veterinary health division, making private equity owner Sovereign a very healthy return on investment, having itself embarked on a massive buy and build drive with Linnaeus. In dental, CBPE acquired the 71 surgery business Rodericks Dental, and BUPA Dental continued its consolidation drive by acquiring Metrodental and Avsan Holdings.

Despite the ongoing challenges and evolution the healthcare sector faces, it remains attractive to investors, both domestic and international, financial and corporate, who are increasingly developing new and innovative ways to participate in a dynamic and ever-changing market.

Read more about our latest healthcare credentials in Leading the Way. [ 1359 kb ] If you’re considering strategic options for 2018 and beyond, please contact Peter Jennings.

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