PJ Solomon is building out its healthcare efforts, bringing on veteran banker Jon Hammack to lead the firm’s global industry efforts and usher in new advisory business in medical technology.
Hammack, with nearly 20 years of investment banking experience including the last eight at Moelis, has joined the firm as managing director and head of the global healthcare group.
The banker, which started last week, has historically focused on advising clients in medical technology and outsourced services. He led the medical technology platform at Moelis, and before that, at Morgan Stanley. He previously worked in the healthcare groups at Credit Suisse and Bank of America.
In the near-term, Hammack said PJ Solomon – whose financial advisory roots lie in consumer and retail – will focus on expanding the platform’s coverage in healthcare services and life sciences, but will remain “open and opportunistic” when it comes to broadening capabilities across all sub-sectors.
Hammack joins PJ Solomon’s Ryan Stewart, who leads healthcare technology and tech-enabled services; and Syed Husain, who advises clients in the pharmacy sector.
“It’s a big sector with a lot of white space. There’s a huge opportunity to take what we have and expand it to take advantage of the velocity we have in other subsectors in healthcare for private equity, and strategics as well,” Hammack said.
Hammack at Moelis focused on driving medtech and outsourcing deal flow through relationships with large-cap strategics, which he will bring to PJ Solomon to complement private equity client engagements.
“Most velocity is in mid-market private equity sell-sides and buy-sides frankly, but that doesn’t mean that we can’t focus on larger deals,” Hammack said. PJ Solomon’s partnership with independently operated affiliate Natixis on the leveraged finance side could “give us an opportunity to move upstream,” he noted.
Hammack’s day-to-day job will remain advising clients in medtech, where he anticipates a busy back half of the year after a slowdown in activity.
“I’d expect post-Labor Day there’s going to be a bunch of stuff that’s hitting the market,” Hammack said, noting the potential tax change forcing people to think about getting transactions done. “That’s probably not dissimilar to healthcare services, however the healthcare services industry never slowed down.”
Particular verticals like contract manufacturing and outsourced pharma services will remain popular areas of investment within his coverage, as well as what has been viewed as more low-tech medtech, such as dental products, he said.
“The medical device sector went through this large consolidation phase five to seven years ago,” Hammack said. “The backend of that phase is still leading to some pretty material carve outs of large companies … But there are still a lot of businesses bought three to five years ago in the space that are on the block to be flipped back to the next buyer.”
Broadly, Hammack expects several years of a busy cycle are ahead with huge sums of capital sitting on the sidelines. But that doesn’t come without its own challenges.
“We’re hearing from a lot of buyers that there is deal fatigue; there is just too much stuff for them to evaluate,” Hammack said. “It makes you think about process [design] more than you may have in other times.”