Healthcare touches everyone’s life, but few understand the complexities of the industry. Healthcare is facing significant change, spurred in part by new regulation and reimbursement models. Consolidation and innovation are triggering unprecedented amounts of M&A activity. Most of the major advances in healthcare involve innovative technologies.  Our team has been working with healthcare technology companies for over thirty years. We understand the value drivers, culture and challenges of the industry. Let Austin Dale Group deliver for you.

Industry Trends

  • Covid-19 – The healthcare industry is at the spearpoint of the global economic disruption caused by the novel coronavirus. ER, ICU, and infectious disease experts are working long hours in difficult conditions, while other specialties are facing furloughs and unemployment.  Healthcare providers, particularly those in rural areas and in economically depressed areas, are being forced to cut back or eliminate services.
  • Telemedicine – Covid has greatly accelerated the existing trend towards increased utilization of telemedicine. Regulators have substantially relaxed credentialing regulations which make it easier for physicians to see patients across state lines and across different care networks.  Technology that enables teleconferencing and virtual work environments is in high demand in healthcare as in other industries.
  • Consolidation – The market turmoil and furloughs will likely trigger a further wave of consolidation in the industry. Economic distress and acute care pressures will force marginal players to seek out partners with deeper pockets to help them withstand the extended disruption that Covid-19 will cause.
  • Testing – Clinical laboratories and medical device manufacturers that support in-clinic and distributed, quick-result testing are seeing unprecedented demand. Substantial resources are being deployed in R&D to support this market boom.  This activity will certainly increase investor interest in this market sector.
  • PPE – There has been unprecedented demand and widespread shortages of Personal Protective Equipment for healthcare workers as well as consumers. Political pressures will likely encourage expansion of production capacity in the USA.


Market and Valuation Trends

  • Market disruption and revenue pressures for providers – in the short-term there will be market turmoil and uncertainty for many healthcare providers. There will likely be downward pressure on some valuations due to this uncertainty. Long-term players may see this as a buying opportunity.
  • Telemedicine – Technology and services which enable telemedicine will likely see high demand and higher valuations.
  • Testing – Testing services and medical equipment manufacturers who support testing are likely to see higher valuations in the near to mid-term due to high demand for services.
  • PPE – PPE manufacturers are also likely to see higher valuations though commoditization and pricing pressure may retard profitability.


What Buyers Want

  • Consolidation/Scale – Bigger is better. Access to new markets and services are desirable for strategic players.  Larger scale also provides greater negotiating leverage with payers and more resources to manage increased regulatory burdens.
  • Innovation to address changing markets – Novel treatments and new technologies that can help to address the Covid and post-Covid market changes.
  • Bargains – Larger players with strong balance sheets will be looking to acquire at fire-sale prices.