With increasingly larger transactions announced in healthcare, an article in The Economist recently highlighted the attractive characteristics driving the titans of private equity increasingly towards this space. Three variables were cited:
- A defensive play: Those in need of medical attention are unlikely to defer care to wait for an economic recovery.
- Growth: The health-care market’s growth has outpaced GDP for decades. Annual spending is now approximately ~$3.5 trillion.
- Bloated cost structures: The innovation and disruption rippling through other industries and making companies more efficient has not yet been mirrored in the healthcare space.
See the article for some great details on specific transactions. Link below.