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 1

At the end of H1 2021, the global, all market average Enterprise Value to EBITDA multiple for listed Healthcare companies was 17.2x.† This was slightly higher than the previous six months when listed Healthcare companies were trading on a multiple of 17.1x. Within the Healthcare sector, trading multiples varied between 14.0x and 22.6x 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 05
/07/2021.

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 greatly decreased over the last six months. It currently stands at 10.2x. Although this is lower than the recent high multiples that the sector benefitted from, the current multiple is still in line with historic averages.

When reviewing these multiples we break out businesses in the range $5-150m, as they tend to have unique attributes which affect their valuation. The multiple for these lower mid-market transactions has remained very high, at 14.2x. This suggests there is still high demand for Healthcare businesses in the lower mid-market, as might be expected due to the pandemic.
* 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 H1 2021, there were 1,879 transactions globally in the Healthcare sector. This is a significant increase on the preceding six months, when there were 1,460 transactions. This high number of transactions, the highest we have seen in our review period, demonstrates the current strength of demand for Healthcare businesses.

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