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Provident Healthcare Partners Provident Healthcare Partners

2021 Year In Review

Provident Healthcare Partners
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Published January 2022

2021 was a record-breaking year for M&A markets, especially within the healthcare services industry. Broadly, global M&A values reached over $5.6 trillion, representing the first time this metric surpassed the $5.0 trillion mark. Within the United States’ healthcare services industry, M&A volumes increased 11% from approximately 1,200 transactions in 2020 to 1,400 in 2021. Investors had their eye on the hospice and home-care sectors most of all, with roughly 200 closed transactions over the calendar year. The highest year-over-year growth occurred within the physician services sector, with a 91% increase in 2021 as compared to 2020. The pharmaceutical services sector also garnered unprecedented interest from financial sponsors and strategic consolidators alike, as drug makers continue to increase their spending in R&D.

Over the past year, private equity established 115 new platform investments in the healthcare services industry, accounting for 16% of the total private equity transactions in 2021. Additionally, the second half of 2021 provided clarity on potential capital gains tax rate increases and the expiration of the Medicare sequester moratorium, both of which look to benefit healthcare operators. Given the current transaction landscape and regulatory climate, Provident expects continued consolidation within the healthcare industry through 2022, characterized by an uptick in middle market add-on investments, where private equity firms continue to leverage a buy-and-build strategy for multiple arbitrage fueled growth.

In this white paper, we examine key investment trends from 2021 in the healthcare services industry as well as go-forward expectations for the sector.

Whitepaper Summary

  • Breakthrough Year for Healthcare Services M&A Volume
  • 2021 Healthcare M&A Trends
  • Provident Case Studies
  • Provident 2021 Closed Transactions
  • Conclusion
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