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Provident Healthcare Partners Provident Healthcare Partners

Investment & Consolidation in the Clinical Diagnostics Industry

Provident Healthcare Partners
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Published November 2020

Given the strong demand for services and a highly fragmented market, the medical diagnostics (Dx) industry is emerging as an extremely attractive area for outside investment and M&A activity. The demand driven by the COVID-19 pandemic is placing pressure on the industry to increase testing volumes and develop novel testing capabilities. Industry tailwinds such as an aging patient population, increasing private insurance coverage, and technological innovation are also attracting investors towards the space.

In recent years, the diagnostics market has seen an influx of capital as investors flock to the rapidly expanding sector. The diagnostics industry constitutes 2% of all medical spending; however, 70% of all medical decisions are a direct result of diagnostic testing results. As a result of this, diagnostics providers are looking to expand capabilities, which is in turn driving investment. Venture capital, private equity investment, and M&A activity in the space has increased substantially leading to an increase in valuations within the sector. Deal volume has remained strong over the past three years.

Report Summary

  • Introduction
  • Consolidation Drivers within the Diagnostics Industry
  • Innovation in Diagnostics is Driving Value Based Care
  • COVID-19 Highlights Multiple Areas for Growth in the Diagnostics Industry
  • What Is Private Equity?
  • Concluding Thoughts

 

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