Happy Friday, health tech fans. We did it.
👀 ICMI: Sen. Mark Kelly (D-Ariz.), Rep Mike Gallagher (R-Wis.) and White House director of science and technology policy Arathi Prabhakar Join Axios’ second annual keynote speaker lineup What is the next conference? Wednesday in Washington DC! Request an invitation to attend over here.
👋 Programming Notes: Aaron will be in Nashville, Tenn. next week for ViVE 2023. If you see him, say hello!
1. Not ’08, but not good
“Offers in the market are being finalized. But new deals have lagged,” Emily Wilds, managing director of Lincoln International, said Wednesday night at the Axios Pro subscriber-only event in Chicago.
Why is it important? The twin factors of SVB’s sudden collapse and rising interest rates have created a unique private equity trading environment in the retail health markets.
The big picture: Lincoln International, a distributor that focuses on retail health care, told Claire that deals are being closed and companies are taking calls. So companies are providing capital.
- “When we started 2023, there was a glimmer of hope in the room and we started to see deals in hot sectors being done at really attractive prices,” Wildes said.
- She was optimistic three weeks ago, but she saw signs that were eerily reminiscent of 2008.
what’s happening: Now, private equity firms have moved into “hunker down” mode, and no one is looking at new deals.
- “Currently, agreements are being finalized, but one a lot Too much,” Wildes said.
- Distressed and distressed companies are coming to market in tandem, and she’s seeing those come to market.
- The middle market is tricky, those deals are still being finalized.
- “I’ve got more time on my hands in 2023 than I’ve had since ’08,” Wilds said.
Yes, but: Private equity is getting into all kinds of deals, including being very aggressive in closing deals in hot sectors — women’s health, cardiology, behavioral health — going all out to win the deal.
What’s next: Looking at potential moves after the current crisis(es) ends and the glut begins, Wills sees cash-strapped businesses as early movers.
- “Things like medical aesthetics and veterinary medicine, as well as seeing high-end models for people who are focused on functional medicine,” says Wilds. “And people need to get back to a more reasonable realm for EBITDA adjustments before the market gets healthy.”