The private equity industry has an estimated $1.78 trillion lined up for potential investments — a 35 percent increase over September 2021 — and analysts will be closely monitoring the healthcare sector for more transactions in the coming months, according to a Nov. 14 report published by Clearwave.
Over the last decade, private equity has invested almost $1 trillion into about 8,000 healthcare transactions, according to PitchBook, and merger and acquisition activity in the space is anticipated to continue in the coming years. Private equity firms typically use their funds to buy and business, make them more efficient and lucrative, and flip them for a significant profit in three to seven years.
Health systems with successful specialty businesses are particularly attractive to potential investors. For systems looking for an exit strategy, this is great news. But for systems looking to avoid consolidation, now is the time to improve the financial health of the business by driving new opportunities for revenue and growth, preserving cash flow and improving efficiencies, according to the report.
According to Clearwave, the best way to avoid being part of a consolidation deal is to "maintain strong, steady growth and healthy, back office-operations."
Click here to access the full report.