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 2020, the global, all market average Enterprise Value to EBITDA multiple for listed Healthcare companies was 16.0x. This was a little lower than the previous six months when listed Healthcare companies were trading on a multiple of 16.2x. Within the Healthcare sector, trading multiples varied between 12.1x and 23.2x 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 01
/07/2020.

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

Healthcare - graph 2

The average multiple of EBITDA* paid globally in Healthcare transactions hasdecreased in comparison to the previous 6 months. It currently stands at 12.9x. 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 H1 2020, there were 1,061 transactions globally in the Healthcare sector. This is slightly down on the preceding 6 months, when there were 1,163 transactions. The number of transactions has remained fairly consistent over the last seven years, suggesting there remain 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.