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Provident Healthcare Partners Provident Healthcare Partners

Q1 Market Update: Optimistic Outlook for 2024

Provident Healthcare Partners
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Healthcare services deal volume in Q1 2024 remained robust and elevated compared to other sectors, reflecting the resilience and strategic maneuvering in the space. Notably, add-on transaction volume outpaced new platform formation as existing strategics continued to prioritize M&A, but secondary transactions were limited due to the interest rate environment for larger transactions. Based on current deals in the market however, we expect an increase in closed secondary transactions by the second half of 2024.

Physician services continued to be active within certain specialties, demonstrated by steady deal flow in a few key subsectors including plastic surgery, cardiology, oncology, and orthopedics. Additionally, non-traditional players, such as large tech companies, shifted the landscape by entering healthcare via M&A. As an example, Arthur Lawrence, a global tech and consulting workforce management firm, acquired Raisso, a healthcare staffing provider. Technological advancements have created new opportunities for groups, especially for strategics that are increasingly focusing their acquisition criteria on technological capabilities in addition to building regional density and increasing patient catchment area.

Investors remain cautious yet optimistic, prompting platforms to adopt a more discerning approach to their partnerships. Groups emphasized the importance long-term value creation, diversifying service offerings to mitigate revenue concentration risks, and engaging operating partners to bring innovative solutions to the consistently evolving healthcare sector.

To print and download the full Q1 2024 Market Update report, please click below…

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