PE HUB Healthcare Wire Highlights, 6.7.18

Pamplona Capital, private equity, healthcare,
Sarah Pringle of Buyouts. Photo by Robert Daniel, Buyouts.

In healthcare PE, you gotta do your homework

Happy Thursday!

I’m back stateside. Back to the grind.

Cuba may not have WiFi but the island does apparently have some bragging rights when it comes to healthcare. The communist country, with a free and universal healthcare system, reportedly has a lower infant mortality rate and similar life expectancy rate than the U.S., but at a tenth of the cost.

So, who’s looking to invest there? Is that even possible right now? LMK at [email protected]

Now that I’m back in the U.S., I’ve been playing catch-up on all the deals I missed.

I also swung by the Jefferies Healthcare Conference in NYC this week. Matt Holthealthcare lead at New Mountain Capital, spoke on the panel Trends in Healthcare Private Equity. He said his team is leaning heavily on levers including add-on acquisitions and involvement with portfolio companies after a deal is done, creating what he likened to “strategic acquisition vehicles.”

In other words, post-deal value creation is more important than ever in today’s high-priced environment. This is why having a strong track record with management teams is so important when it comes to creating new opportunities, Holt said. Especially when firms sit down with founders or corporate sellers in carve-out situations, said Holt. Private equity has a mixed reputation with strategics, he said.

Strategic competition is another complication in today’s deal market, Holt said. “From our experience, strategic buyers have a very inconsistent approach to diligence and the process itself.”

Some strategics do little to no diligence and manage to sign up a deal in 30 days, while the behavior of others makes for a longer process, he said. “In one situation, there were nearly 200 people from the company involved in the data room … but the price was alluring.”

From a subsector perspective, Holt hinted that his team is “spending a lot of calories” in and around the home, a field that has seen a considerable amount of notable activity already this year. Consider the $4.1 billion take-private of Kindred by HumanaWelsh Carson and TPG.


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