60 Seconds With Swett: PE Firms Scrutinize Labor-Intensive Healthcare Deals
I attended the McDermott Will & Emery HPE New York event last week and learned a lot about private equity firms’ healthcare M&A strategies, and how valuations, deal processes, terms and their targeted sectors are changing in a rising interest rate world and in a recession. Healthcare companies are going through many of the same woes as senior care: fraught sponsor/lender relationships, wide bid-ask spreads, increased deal scrutiny from buyers and capital providers. That last one doesn’t sound bad. And there were always the optimistic comments around demographics and healthcare’s recession-resistance. But the general observation was that the party has ended, and the M&A boom of... Read More »
60 Seconds with Steve Monroe: Change Is In The Air
I have to admit, I was a bit surprised about the announcement that Brian Jurutka is leaving National Investment Center for Seniors Housing and Care (NIC). I think he was surprised as well. I thought I had a pretty good relationship with him, he was always open and always promptly responded if I had any questions. I also thought he did a good job leading NIC through the COVID crisis when its major revenue stream, the conferences, were forced to go virtual. And in one case, moving the conference to another city at the last minute where it was hoped the warmer climate would help attendance. All without breaking into a sweat. I will miss him. And Brian, if you want to stay in seniors housing,... Read More »
60 Seconds With Swett: Everybody’s Talking About Brookdale
This week, we can’t not talk about Brookdale Senior Living reportedly exploring a sale of the company and engaging with advisers to find potential buyers, and the rumors are flying. Will Healthpeak Properties, now under the helm of Welltower alumnus Scott Brinker, reenter the seniors housing market in the big way by buying Brookdale? Or will Ventas, with its size and its warrants to buy 16.3 million shares at about $3 per share, be the buyer? Or will a PE firm take the company private and continue the long road to recovery without an eye towards quarterly earnings reports. There is also the question of whether Brookdale CEO Cindy Baier will stay on in her role after more than four years as... Read More »60 Seconds With Swett: Q3 Ends on a Down Note
We recorded 133 publicly announced seniors housing and care transactions in the third quarter, for an average of over 44 deals a month. That is the fourth-highest quarterly deal total ever recorded by LevinPro LTC, but is lower than the each of the last three quarters. What is very interesting though is that the rolling-12-month deal total has never been higher. In the period from October 1st, 2021 to September 30th, 2022, we have recorded 553 publicly announced transactions, down just one deal from the previous 12-month span ending August 31st, 2022, and that total has crept up steadily throughout the year. It’s also a preliminary total that is bound to rise. To put it in perspective, the... Read More »60 Seconds With Swett: SNF Values Have Hit Their Peak
We have hit a valuation peak for skilled nursing facilities, and we do not feel like we are going out on a limb in saying it. That is because soaring interest rates have made acquiring facilities at extremely high prices much more expensive. The realities of a difficult operating environment concerning labor and inflation must also be top of mind for lenders, which are probing deals very deliberately, as they should. Regulatory issues have also made deals tougher, and longer, to close, and delays can be especially costly as the Fed keeps increasing rates. That being said, we have also heard of more than several cases of renegotiations, final bids coming in lower than the initial bids, and... Read More »Schedule a demo
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