Each January, JP Morgan’s annual Healthcare Conference draws industry leaders to San Francisco to discuss M&A, investment, and the business of healthcare. In recent years, the impact of the conference has extended beyond the four walls of hotel banquet halls into a four-day, city-wide ecosystem of entrepreneurs, practitioners, advisors, and investors – all focused on healthcare.
MHT Partners views the conference as a critical opportunity for understanding emerging healthcare industry trends and investor sentiment as we kick off the new year. Our healthcare team was on the ground, where we conducted over 50 meetings with investors representing over $20 billion of investable capital. These are our key takeaways:
- Investors remain enthusiastic about healthcare services: There are dozens of investors with large amounts of dry powder who are intensely focused on investing in healthcare services. The appetite for high-performing businesses remains strong.
- The MSO structure is primed to be applied to new specialties: Interest abounds to apply the managed services organization (“MSO”) structure for investing in provider groups to specialties with opportunities for consolidation and strong macro tailwinds. Orthopedics, women’s health, and gastroenterology platforms will receive outsized interest from investors in 2018, and landmark deals will be announced in each of those specialties. Conversations are also beginning to take place within specialties such as ENT, urology, and podiatry.
- More mature specialties will begin to consolidate into a few large platforms: Dental, dermatology, and eye care businesses will continue to receive significant attention from investors, and a handful of larger existing platforms will come together as those specialties continue to consolidate.
- Autism therapy is a growing area of focus: Adolescent behavioral therapy, including autism therapy, represents an emerging thesis for many investors. KKR announced the creation of Blue Sprig Pediatrics during the conference, and Autism Learning Partners traded to FFL Partners at the end of 2017. It was also recently announced that CARD will be coming to market in the near future.
- Healthcare interest extends to the animal kingdom: A number of healthcare investors expressed interested in veterinary and animal health businesses, to which they can apply a similar multi-site treatment thesis without the reimbursement dynamics that accompany traditional healthcare.
2018 is poised to be a year of significant opportunity for strategically minded healthcare companies and investors. MHT Partners’ healthcare investment banking team is focused on identifying prevailing industry trends, positioning your business to capitalize upon them, and identifying the right partner for you going forward.