Word of the week: One prominent i-bank in healthcare is hosting a small VIP group of PE professionals this week at a top ski resort out West.
I’ve heard about ski trips like these put on by other banks, as well as by major lenders and law firms. … So, now I’m wondering: How much deal talk actually takes place at these things?! Is it all about that fresh pow pow and apres-ski?
Elsewhere, some are getting ready for HIMSS – the big healthcare IT conference in Orlando next week. I spent some time this week catching up with contacts in the segment, one of whom said certain PE groups appear to be in hold mode. Why? “Everybody wants an investment in healthcare IT,” so if you sell your business, you’ve gotta go out and find something else. That’s not an easy feat in today’s hypercompetitive environment.
This person also noted that some forward-thinking PE firms are having more dialog about socialized medicine and what that could mean for deals. Anybody payer-focused might be a little concerned, although ultimately it’s probably just a lot of noise, this person added.
With so many healthcare-IT deals having scaled and cycled through, and thus with scarcity value an issue for investors eager to deploy huge amounts of dry powder, we may see more folks get creative as a means to find sizable investments.
Grooming for HCIT carveouts
How regulation and policy unfold is anyone’s guess. But the healthcare landscape will certainly continue to evolve, creating interesting new opportunities for sponsors as the supply-chain lines blur.
For instance, 2018 saw complex deal structures unfold, such as Clayton, Dubilier & Rice’s partnership deal for Cardinal Health’s naviHealth.
But today I’m talking about the hospital end of the market. Besides partnering with or buying up physician specialties, hospitals over the years have redefined their strategies by acquiring revenue-cycle-management businesses to maximize collection of payments from patients.
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