January 17, 2023

Takeaways From the 2023 JPM Conference

Takeaways from the 2023 JPM Conference


Perspectives gathered by seven BCA bankers from middle market investors, lenders, executives and professionals orbiting the J.P. Morgan Healthcare Conference


General Market Observations

  • Debt markets tightened significantly during 2022 as lenders focus inward on credit quality
    • Fewer lenders supporting platform recap transactions leverage multiples are lower
    • Existing credit facilities are more expensive available funding for add ons has come down
  • Middle market deal volume has slowed in 4Q22 and early 2023
    • Activity for high quality assets in the lower middle market will remain strong however, levered recap transactions valued at $250M+ will be less frequent in 1H23
  • While it’s not a buyers market, valuations are down from 2021 highs and have returned to normalized pre-pandemic levels
  • Transactions driven by strategic synergies are the most appealing in the current environment
  • Excellent time for portfolio add-ons and tuck-in deals


Healthcare Services Observations

  • Investors are expressing cautious interest in most provider models developing value based revenue streams
  • Behavioral health across most services settings continues to attract interest
  • Retail health strategies, such as urgent care and dental, are finding favor
  • Healthcare provider models mentioned frequently during the conference
    • Primary care services ranging from global MA risk to home based
    • Among physician specialties, cardiology is grabbing the most attention
    • Outsourced services into the pharma channel
    • Innovative home care models such as hospital at home or aging at home enablement
    • Other sub-sectors: med spa, Medicaid risk models, home DME and ambulatory infusion
  • Staffing shortages expenses are impacting provider model performance across the continuum


Healthcare Technology Observations

  • HCT assets are facing greater scrutiny in terms of the “have to have” vs “nice to have” dichotomy demonstrable ROI is critical
  • Repricing on multiples across most sectors of HCT
  • Continuing significant interest in revenue cycle management assets – specifically complex claims
  • Profitability matters – the bias has shifted away from growth at all costs to profitable growth

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