Howdy, dealmakers! This is Aaron filling in for MK today on this beautiful Monday morning, while she gets some much needed and deserved time away from the never-ending news cycle.
If I am writing to you, then you have to know by now that I will be talking healthcare. I had a chance to speak with Alex Mason, partner at FTV Capital as part of my ongoing healthcare spotlight series (you can look for this profile to come out in a few weeks!)
One thing I have been asking my healthcare sources is what they think about the mega Amazon and One Medical deal that went down in July. Though it might be too soon to know what the ramifications are, this deal is, at the very least, sending signals of where the market is going.
“It’s not surprising what Amazon did with One Medical, if you think about the trends with consumerization and patients’ increasing expectations around frictionless digital experiences,” Mason said. “Think about what that means for the healthcare ecosystem: with the adoption and ongoing usage of technology and telehealth, there are significant implications for the market overall and healthcare M&A, which I think will continue to drive innovation.”
He added that there has been a wave of acquisitions and believes we can’t ignore the impact of covid on areas like telehealth and post-acute care.
“With post-acute care, it’s not just about aging demographics, but also changing preferences around the patient experience,” he said. “We also have to look at cost avoidance, the advantage of delivering outside of the acute setting, and then all of the coordination that has to happen in a distributed environment. When you start to pull all of these pieces together – which in an analog, very geographic-centered world you couldn’t do before – these boundaries start to loosen. We’re going to see a persistent and increased amount of M&A activity in healthcare.”
In-person interactions. As part of my aforementioned healthcare spotlight series, I have my first in-person interview since pre-covid tomorrow! I will be heading over to the offices of Welsh, Carson, Anderson & Stowe and meeting with Brian Regan, head of the healthcare group, a general partner and a member of the management committee, who joined WCAS in 2002.
I always enjoy meeting with people in person – as opposed to Zoom – so if you ever want to get a coffee, a drink at happy hour or even a talk over lunch, feel free to email me and we can set something up! Aaron.email@example.com
Vintage year? The fearless leader of the PE Hub Europe team, Craig McGlashan, spoke with Jean-Baptiste Wautier, partner and chief investment officer, private equity, at BC Partners about how he believes the spluttering financing market could be in better shape by early 2023.
Macro uncertainty and a quasi-shutdown of debt markets in Europe are behind the difficult conditions, Wautier, who is also a member of the management committee, told PE Hub Europe.
“We continue to be incredibly disciplined and to actively explore a healthy pipeline of opportunities because there will be a point at which the market reopens,” he said. “If there is a major repricing, then this is likely to be one of the best vintages you’ve seen on the PE side for many years, just like 2010 or 2002.”
That reopening could come as soon as next year, if financial market history repeats itself, said Wautier. “When we’ve had periods of quasi closures like this, for example post-Lehman, it’s usually for less than a year because the system cannot stop functioning for too long. Banks need revenues to exist, and to get revenue they need to lend money. Institutional investors need returns to meet their liabilities such as pension payments.”
That is going to do it for me! MK will be back tomorrow, and I will talk to all you lovely people again on Friday – have a great week!