When COVID-19 and the associated lockdowns first took hold in March 2020, the outlook for the world economy was entirely uncertain, causing a trickle-down effect in the private equity and M&A markets. Nearly all ongoing transaction processes were put on hold and new deals coming to market saw revised transaction timelines. Areas within healthcare services heavily reliant on preventative care or elective procedures, such as dental practices, were hit especially hard, as patient volumes and associated revenues dropped precipitously almost overnight. Despite these challenges, Provident successfully closed 14 transactions in 2020 across a range of healthcare services verticals by utilizing creative transaction structures to maintain previously agreed upon valuation levels.
As the initial wave of lockdowns subsided, private equity firms and strategic consolidators began to utilize creative deal structures to complete transactions, and deal volumes ticked upward over the summer and fall months. The three most common deal structures buyers employed were the use of seller notes, increased equity capital to finance deals and most often, deferring some portion of the transaction proceeds to a future date.
•2020 Overview & COVID-19 Impact on M&A Activity
•Provident Case Studies During COVID-19
•Concluding Thoughts & Outlook on 2021
•Provident Transactions Closed in 2020