This month’s issue of the monthly executive brief providing M&A market insight for C-level management and their professional advisors.
The baby boom generation, the 79 million Americans born between 1946 and 1964, grows another year older in 2012, the second year that the generation officially adds to our retirement age population. As the average age of the population increases, so does the amount spent annually on healthcare in the USA.
First quarter 2012 private equity data indicates that the healthcare sector is once again the top industry sector in terms of company valuations. We saw a revival of the “quality premium” in Q1, as better performers were once again rewarded with higher values and size was not the dominant factor it has been the past two years. This upward trend in healthcare multiples shows no sign of reversing anytime soon. During times of economic stress, healthcare related industries offer both job creation and revenue stability. An increasing aging population also helps ensure that healthcare spending will be an increasing share of the US economy. As more Americans return to work and can once again afford health insurance, health related spending in both private and public sectors is forecast to increase.
The healthcare industry is highly regulated and new entrants face not only a strict regulatory environment, but stiff competition between industry segments. Experts in running a healthcare concern will continually look to acquire other healthcare companies with strategic or tactical advantages including cost reduction and revenue diversification with their eye on the prize...future market growth. In all likelihood, the golden years of the boomer generation (2011 through 2029) will provide a windfall for healthcare companies, both in the USA and abroad.
For additional information contact:
Douglas Nix, CA | Vice Chairman
Corporate Finance Associates | Toronto West | 905-845-4340 x211 | firstname.lastname@example.org