Last week, The Wall Street Journal published an article examining private equity activity in the healthcare M&A market, specifically that its activity was down compared with 2023 because of increased regulatory scrutiny and higher interest rates. The article cited Pitchbook transaction data, and some of the numbers left our editors at our sister platform LevinPro HC, which exclusively covers the healthcare M&A market, scratching their heads.
According to Pitchbook, as cited in the article, there were 180 PE add-on deals, or when a PE firm buys a company through a portfolio company, through May 28. Our numbers are higher, as LevinPro HC recorded 193 deals from a PE-backed company, and 255 if you include direct PE investments, mainly across sectors like physician groups, behavioral health and ancillary services. Importantly, Pitchbook includes veterinary and skilled nursing deals in their totals, while LevinPro HC does not, which would significantly add to its totals too. We checked Pitchbook’s first quarter Healthcare Services Report, too, which showed 101 PE deals in Q1:2024, 62 of which were add-on acquisitions. LevinPro HC tracked 149 PE deals and 111 add-on deals in the same period.
LevinPro HC shows a similar trend, that PE activity is, in fact, down year over year. But it shows that PE activity is still historically very high. In Q1:19, for example, there were 96 PE deals. Want to guess how many there were in Q1:14? 17. So, with more accuracy and context, PE is still bullish on the healthcare market.
