Health services deals have slowed some compared to surges in recent years, according to a midyear report from PWC.
Five notes:
1. Health service deal volumes in the year ending May 15, 2023 saw a 4 percent dip compared to 2022. But compared to the timeframe between 2018 to 2020, volumes were nearly twice as high.
2. Enterprise value in the industry to EBITDA multiples have been steady since the end of 2022 but fell from higher levels seen toward the end of 2021. The average multiple across health services subsectors as of May 15 was 13.6x compared to 13.7 as of Dec. 31, 2022 and 15.9x as of Dec. 31, 2021.
3. More than half of the deals announced in the 12 months ending May 15, 2023 were from megadeals such as CVS' $10.6 billion acquisition of Oak Street Health and Village MD’s $8.9 billion acquisition of Summit Health-City MD.
4. Merger and acquisition integrations have played a key role in deals as CEOs are looking to reposition their companies for the long run.
5. Key deal drivers listed in the report include opportunities amid headwinds, the need for business reinvention and capital allocation.