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Healthcare private equity had a record year with deal values close to $79 billion

The increasing size of healthcare deal values stemmed primarily from large buyouts, as the average deal size rose roughly 25%.

Jeff Lagasse, Associate Editor

Healthcare private equity had a banner year in 2019, topping off a decade of remarkable growth. In the face of growing macroeconomic instability around the globe, total disclosed deal values climbed to $78.9 billion dollars in 2019, the highest values on record. Total deals reached in 2019 numbered 313, slightly down from the 316 deals completed in 2018.

These are the findings from Bain and Company's ninth Global Healthcare Private Equity and Corporate M&A Report.

North American healthcare private equity investments made during the past recession saw a multiple on invested capital nearly 50% higher than other sectors. Valuation multiples are close to an all-time high, raising the bar to invest and deliver differentiated deal returns.

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The increasing size of healthcare deal values stemmed primarily from large buyouts, as the average deal size rose roughly 25% in 2019, with 27 deals reaching values of $1 billion or more, compared to 18 such deals in 2018. This includes the largest buyout in at least the past decade: the $10.1 billion acquisition of Nestlé Skin Health by EQT and Abu Dhabi Investment Authority.

This increase in large deals indicates the confidence investors have in placing a greater percentage of portfolios in the sector.

While North American activity rose modestly, values jumped 58% to $46.7 billion in 2019, up from $29.6 billion in 2018. Europe saw an 11% increase in values to $19.7 billion, largely fueled by the Nestlé Skin Health acquisition, continuing the trend of gem biopharma assets composing the most deal value in Europe. This was slightly offset by the Asia-Pacific region, which saw a decline in volume from a record-setting $16.2 billion in 2018 to $11.5 billion in 2019, driven mainly by slowing activity in China. Despite the slowing pace of activity, this remains a 60% increase over Asia-Pacific's five-year-average.

Along with deal activity, healthcare exits also posted a banner year. Disclosed deal value rose 29% to $40.8 billion and count rose 13% to 126.

Related to this is corporate merger and acquisition activity, the deal value of which rose 24% in 2019 on the back of two megadeals: Bristol-Myers Squibb's acquisition of Celgene for $97 billion and AbbVie's purchase of Allergan for $85 billion.

In past years, corporate healthcare companies have increasingly turned to M&A to place option bets on disruptors in their respective industries and prune underperforming and non-core assets.


Biopharma continues to be hot, with deal value rising nearly 150%, by $24.2 billion in 2019, encompassing most of the value growth across sectors. This is thanks to several megadeals, namely the Nestlé Skin Health acquisition, composing about 25% of the biopharma total. Advances in cell and gene therapy, along with life-sciences diagnostics, sparked excitement and drew capital from both sponsors and corporates.

Investment in Healthcare IT roughly doubled in value since 2018, rising to 17.5 billion in 2019. Value was pushed by two of the biggest deals of the year – Press Ganey and Waystar – which accounted for about 40% of disclosed deal value. Investors were excited about HCIT tied to payers and biopharma, in addition to their ongoing interest in provider IT.

Meanwhile, assets that incorporate data and analytics continue to be attractive sources of competitive advantage for investors in healthcare. Bain and Company expects to see greater demand for companies that focus on monetizing useful healthcare data.


The numbers are in line with a March 2019 prediction from PricewaterhouseCoopers that private-equity activity in healthcare would accelerate. This, said PwC, would give traditional healthcare companies opportunities to sell all or parts of non-core assets and double down on their core competencies, or partner with private equity in acquisitions in which they would otherwise be competing against each other – or unable to act on their own.

Twitter: @JELagasse

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