On September 22, 2020, Norton Rose Fulbright US LLP and Ernst & Young LLP held their 5th Annual Health Care Private Equity Conference.  As with most other conferences this year, this event was hosted virtually.  NRF Partner Warren J. Nimetz, led an insightful and lively discussion on the annual panel “What’s Hot and What’s Not” with Buddy Gumina, Founder and Managing Partner, Grant Avenue Capital, David Morlock, Managing Director, Cain Brothers, Miriam Tawil, Managing Director, New York, Centerbridge Partners, and Dan Shoenholz, Partner/Principal, Health Care M&A Practice, EY- Parthenon about the future of healthcare in ‘uncertain times’.

Warren led discussions on topics ranging from healthcare market M&A activity trends and specific healthcare areas that PE has its eye on to implications based on who is going to win the upcoming presidential election between Donald Trump and Joe Biden, among other cutting edge topics.

It’s difficult to pick which takeaways to highlight from these discussions, but we have included a few below:

  • Despite a dip in the Q2, healthcare M&A activity rebounded in Q3 and looks to be strong in the future;
  • Large health systems are increasingly looking for PE partners with established ancillary service provider (e.g., laboratories and urgent care) expertise;
  • PE is increasingly targeted and thematic in their selection of potential targets, with a focus on home-based care, behavioral health, and low-tech branded medical products that can connect providers directly to the consumers (not surprising given the success of Amazon);
  • COVID-19 has advanced the telehealth space by 5 to 10 years and, regardless of reimbursement changes, appears to be a focus of both strategic and financial buyers and is here to stay even in the post-COVID-19 era;
  • COVID-19 has accelerated pre-existing trends in the market (e.g., the move from inpatient to outpatient care);
  • Financing, although chilled early into the pandemic, is back and available to financially-strong candidates;
  • Multiples remain robust, but macro fears (e.g., a possible recession) loom; and
  • The market has not seen a rush yet by stronger players to acquire weaker players among hospitals, but once stimulus money dries up there may be accelerated pressure on smaller community based facilities.

Treat yourself to the entire discussion and listen to the full recording, and consider joining NRF and E&Y next year for this annual event!