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September 2021  

Private Equity and Health Care Investments: How Has COVID-19 Impacted Deal Flow?

This Briefing is brought to you by the Transactions Affinity Group of AHLA’s Business Law and Governance Practice Group.
  • September 15, 2021
  • Arielle Schmeck , JTaylor

Entering 2020, private equity (PE) investment in health care services was on pace to surpass historic rates of investment in the industry, despite PE health care deal activity achieving record highs in the preceding years (2019 total deal value reached an all-time of $74.4 million, which is a 23% compound annual growth rate since 2014). However, by mid-March 2020, the health care services deal space, along with most other transaction activity, came to a complete halt as the COVID-19 pandemic forced businesses to close and created significant economic uncertainty. While many industries saw a significant decline in total investment throughout the remainder of 2020, many PE investors turned to the health care services arena as somewhat of a safe haven as the U.S. economy began to re-open in the second half of 2020. In total, while deal value decreased by 7% from 2019 to 2020, total deal count increased by 10% as more investors looked to add-on to existing platforms rather than seeking out new, larger targets of interest.

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