Healthcare

Sector specialists who deliver maximum value

Our healthcare sector team combines a broad range of experience across the pharmaceuticals, medical devices, healthcare services, healthcare insurance, hospital and care home industries. 

Members of our advisory team have worked in an operational, management or advisory capacity for a wide variety of companies in the sector, including:

 

How much are companies worth in the Healthcare sector?

The following 3 graphs will give private business owners a broad indication of the value of their business:

1. The Enterprise Value to EBITDA* multiples on which comparable listed companies are trading
Healthcare graph v3

At the end of H2 2019, the global, all market average Enterprise Value to EBITDA multiple for listed Healthcare companies was 16.2x. This was slightly higher than the previous six months and also up on the previous year, when listed Healthcare companies were trading on a multiple of 15.0x. Within the Healthcare sector, trading multiples varied between 13.2x and 22.0x across the range of sub-sectors. Smaller businesses generally traded on lower multiples.

* EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation
† Note, the Enterprise Value to EBITDA multiples above are for listed businesses. By comparison privately owned businesses are generally valued at a discount. Listed company data was accurate at 10/01/2020.

2. The multiple of EBITDA paid by acquirers of comparable businesses

healthcare graph 2

The average multiple of EBITDA* paid globally in Healthcare transactions has increased significantly in comparison to previous years. It currently stands at 17.2x. When reviewing these multiples we break out  businesses in the range $5-150m, as they tend to have unique attributes which affect their valuation.

* EBITDA is Earnings Before Interest, Tax, Depreciation and Amortisation
†Note, the transaction multiples above are calculated from raw historic data. This typically understates profits and therefore valuations actually achieved are generally at lower multiples of “normalised” profits.

3. The volume of M&A transactions and acquisitions

healthcare graph 3

In H2 2019, there were 1,163 transactions globally in the Healthcare sector. This is slightly up on the preceding 6 months, when there were 1,074 transactions. The number of transactions per 6 months has remained fairly consistent over the last 5 years, suggesting there remains plenty of interested buyers in the market.

For further information as to how these valuations and statistics are computed, and their impact on your transaction, please contact us.