Blackstone calls out uncertainty, volatility; AE Industrial acquires Ardent Environmental

Healthcare IPOs in the PE and VC space slip in the first half of the year.

Happy Fri-yay, Hubsters! It is Aaron here on the wire today to finish off the week.

Healthcare exits: It’s a struggle in the exits arena. Healthcare IPOs in the PE and VC space were down in the first half of 2022, with M&A activity dropping significantly. Silicon Valley Bank predicts thing will stay that way until valuations hit rock bottom, investors regain their appetite to acquire again and exits pick back up.

The report also notes that 510(k)’s (the technical dossier required by the US FDA to sell a medium-risk medical device or IVD in the US) most recent exits have yielded higher deal values and better returns for investors with less time and money spent.

“We continue to see less pre-FDA premarket approval M&A deals, with longer time to exit and smaller deal sizes and multiples,” the report said. “M&A deal size may increase as the IPO market remains closed.”

I hope to speak with Jon in more detail next week and will report back with more numbers and data around healthcare M&A.

In the meantime, doesn’t it feel like activity is slow right now? Please don’t hesitate to hit me up at aaron.w@peimedia.com and let me know what you are seeing and hearing out there, whether its healthcare specific or overall market patterns. I am all ears and would love to get more market chatter in the wire.

Speaking of exits, Carlyle appears to have agreed to a big one with Amazon. The ecommerece behemoth agreed to buy One Medical for a price tag of $3.9 billion, according to the Financial Times.

Amazon isn’t the only one that is trying to either get in or expand its footprint in healthcare. If you know of a healthcare acquisition or exit, you can always drop me a line fill me in on it. Exclusives are preferred, of course.

Slowdown: Buyouts’ Kirk Falconer covered Blackstone’s Q2 earnings call, as the PE giant reaffirmed its’ $150 billion fundraising goal despite “more challenging environment.”

“It is getting harder out there,” president and COO Jonathan Gray said in the firm’s second-quarter 2022 earnings call in reply to a question about fundraising trends. “It’s particularly tough in North American private equity with institutions.”

“Fundraising challenges have risen in recent months in tandem with uncertainty and volatility. Dynamics have also changed as GPs, who continue to bring new offerings to market at a fast pace and with bigger tickets, are encountering reduced supply due to overallocated LPs,” wrote Kirk.

This is not the first time we have heard about fundraising challenges and that is having a trickle down effect into dealmaking. If you have thoughts on this issue, please feel free to reach out to us to discuss it.

Read the whole story here.

Environmental consulting: PE Hub’s Obey Martin Manayiti recently wrote about Enercon, an engineering and environmental services firm backed by AE Industrial Partners and its acquisition of Ardent Environmental Group, a provider of environmental site assessments, remediation, monitoring and other services.

Obey talked with Bryan McElwee, a principal at the Boca Raton, Florida, PE firm.

“The environmental consulting market presents an extremely attractive investment opportunity,” McElwee said. The market is highly fragmented, with service providers segmented by both geography and area of expertise. “Those companies that can establish themselves as a consolidator, offering customers a one-stop shop for services, will have a significant advantage, especially among large blue-chip clients,” he noted.

“Renewable energy, data centers and electric vehicle infrastructure are among the sectors ripe for these services, McElwee said. Growth in these sectors is largely underpinned by advancing technology, growing bandwidth consumption and federal infrastructure mandates,” wrote Obey.

Read the whole story here.

That is a wrap for today/this week. I hope everyone stays hydrated and cool out there, it is going to be a hot one this weekend. MK is up next on Monday and has some very exciting news to share with you. Stay tuned…

Cheers,

Aaron