On this episode of The Banker's Corner, Kyle Brown, Managing Director at Brown Gibbons Lang & Company joins McGuireWoods' Geoff Cockrell to discuss the latest developments in healthcare private equity investing.

With the current deal market offering lower valuations, companies are looking at internal improvements, such as operations and platform infrastructure, as well as mergers and organic growth strategies. Kyle discusses how diversification, platform infrastructure, and a true dual-pronged growth strategy are key drivers of value regardless of the sub-sector.

“Sure, buy-and-build all day. You have that integration strategy in spades, great. But I've seen, and not because of the debt financing markets, but really since COVID, folks are putting a premium on de novo growth strategies,” Kyle says.

Kyle and Geoff also discuss two subsectors that they predict will have increased investor activity in 2023: orthopedics and pain management. Both sectors have unique traits that add value to investors and make them ideal for investment activity.

Name: Kyle Brown

What he does: Kyle is the Managing Director at Brown Gibbons Lang & Company. He is a senior member of BGL’s Healthcare & Life Sciences team, focusing on Healthcare Provider Services.

Organization: Brown Gibbons Lang & Company

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This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

On this episode of The Banker's Corner, McGuireWoods' Geoff Cockrell invites Raj Kothari, Managing Director at Cascade Partners, to discuss the current challenges of the healthcare investing market.

An uncertain market and disagreements on valuations have created an interesting start to 2023, which saw a decrease in transactions in the first quarter. For those looking to make larger healthcare sales, the general consensus seems to be to wait until Q2 or Q3 and see if market conditions improve.

Raj recognizes that buyers are being more thoughtful and cautious when considering a deal. However, the lower and middle market valuations are holding up.

“If you’re an investor, you're looking for long-term cyclical trends, and all the long-term cyclical trends say that [healthcare-related services] are going to work well,” Raj says on why he chooses to play in the healthcare sector. “If you've got a good service or technology that lowers costs or improves efficiency, and does anything to help, it's going to get more and more traction.”

Name: Rajesh Kothari

What he does: Raj is the founder and managing director of Cascade Partners where he leads divestitures, recapitalizations, acquisitions, and other strategic transactions for clients in the healthcare, industrials, business services, and technology sectors. He has also co-managed multiple private equity funds and dozens of early-stage investments to buyout.

Organization: Cascade Partners

Connect: LinkedIn

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Subscribe to The Banker’s Corner in your preferred podcast app so that you never miss an episode.

This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.

With higher interest rates causing anxiety throughout much of the first quarter of 2023, McGuireWoods' Geoff Cockrell invites David Baker, Managing Director at FTI Consulting Group, to share his view of the market and how it’s impacting sellers in the M&A space.

Healthcare as an industry is more resilient in a down economy, David explains, as demand is less likely to be impacted by economic factors. This resilience attracts investors looking to avoid the challenges present in other sectors.

“I think what attracts a lot of investors to the segment is how steady it is,” says David. “Healthcare hasn't had the highs and lows that many other sectors have gotten over the years.”

The healthcare economy needs efficiency to close the current gap between demand and supply, and investors who find these solutions will emerge as winners. With interest rates on the rise, David provides insights into how this is impacting overall pricing and deal structures, along with what buyers and sellers need to be considering.

Name: David Baker

What he does: David is a member of FTI Capital Advisors, FTI Consulting’s investment banking subsidiary. He has over 30 years of experience in international M&A, capital formation, partnership agreements, and corporate strategic development.

Organization: FTI Consulting

Connect: LinkedIn

Connect with us on Facebook, Twitter, Instagram, YouTube.

Subscribe to The Banker’s Corner in your preferred podcast app so that you never miss an episode.

This podcast was recorded and is being made available by McGuireWoods for informational purposes only. By accessing this podcast, you acknowledge that McGuireWoods makes no warranty, guarantee, or representation as to the accuracy or sufficiency of the information featured in the podcast. The views, information, or opinions expressed during this podcast series are solely those of the individuals involved and do not necessarily reflect those of McGuireWoods. This podcast should not be used as a substitute for competent legal advice from a licensed professional attorney in your state and should not be construed as an offer to make or consider any investment or course of action.