您的浏览器禁用了JavaScript(一种计算机语言,用以实现您与网页的交互),请解除该禁用,或者联系我们。[PitchBook]:Takeaways From the 2024 McGuireWoods HCPE Conference - 发现报告
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Takeaways From the 2024 McGuireWoods HCPE Conference

2024-05-15Rebecca SpringerPitchBook刘***
Takeaways From the 2024 McGuireWoods HCPE Conference

PitchBookData,Inc. JohnGabbertFounder,CEO NizarTarhuniVicePresident,InstitutionalResearchandEditorial PaulCondraHeadofEmergingTechnologyResearch InstitutionalResearchGroup Analysis RebeccaSpringer,Ph.D. LeadAnalyst,Healthcarerebecca.springer@pitchbook.com pbinstitutionalresearch@pitchbook.com Publishing DesignedbyJuliaMidkiff PublishedonMay15,2024 Contents Keytakeaways1 Introduction2 Dealenvironment2 Regulatoryenvironment3 ThefutureofPPMs—again4 Medspa—andthenextwellnessplay5 Pharmaservices6 INDUSTRYRESEARCH TakeawaysFromthe2024McGuireWoodsHCPEConference PitchBookisaMorningstarcompanyprovidingthemostcomprehensive,mostaccurate,andhard-to-finddataforprofessionalsdoingbusinessintheprivatemarkets. Keytakeaways •Thedealenvironmentismoreactivethanitwasayearago,butthatactivityisnotyetmaterializingintoannouncementsasdealprocessesmoveforwardhaltingly. •Aswehavemaintainedsincelastyear,thebeginningoftheFederalReserve’srate-cuttingcycleislikelytobetheimpetusforaseriousresumptionindealactivity.Furtherhigher-for-longersignalscouldalsopromptsellerstobitethebulletandsell. •Asthebroadlysyndicatedloanmarketreopens,thefinancingenvironmentisbecomingslightlymorebuyerfriendly,especiallyintheupperhalfofthemarket.EBITDAandinterestcoverageremainthekeyareasoflenderscrutiny. •Theantitrustenvironmentwasfrequentlymentionedinmain-stagesessions.ManyspeakerspointedoutPE’scontributiontoaccessandinnovationinhealthcare,butofcourse,thosewhoneededtobeconvincedwerenotin theroom. •PPMshavefallensoseverelyoutoffashionthatthecurrentperiodwascomparedtothe1990s—anoverstatement,butindicativeofthemarket’ssentiment. •Physiciancompensationisbecomingevenmorechallengingthanusualaselongatedholdingtimesandmargincompressionerodethevalueofthe“secondbite.” •Twophrasesutteredinthestanding-room-onlymedspasession:“painfullyfragmented”and“printcash.”Wearemoreinterestedintheconsumer-drivenwellnessplaysthatmightfollow. •Overheardinthepharmaservicessession:“likeamultisitephysicianpracticedealbutwithoutallthehassleandwith10xthemargin.”Weexpectfrothyvaluationsherein2024. 1 Introduction The20thannualMcGuireWoodsHealthcarePrivateEquityandFinanceconference(HCPE)broughtarecord1,065attendeestoChicago.TraditionallyheldinFebruaryorMarch,theconferencemadeawelcomeshiftthisyeartoMay8and9.Comparedwithitsrivalevent,McGuireWoodsHCPEismorebuttonedupandcontentforward,withsimultaneoustopicaltracksonbothdays.Theconferencealwaysincludesabig-namepoliticalspeakersession,andthethought-provokingandentertainingduoofReincePriebusandDavidAxelrodheadlinedthisyear’sagenda.HCPEisdecidedlyalower-andcore-middle-marketconference,withstrongattendancefrombothactiveandprospectivePEportfoliocompaniesaswellasserviceprovidersandlenders.Wealsonotedmore—andmoreseniorrepresentativesof—PEfirmsinattendancethisyearthaninpreviousyears. Dealenvironment Thedealenvironmentiscertainlymoreactivethanitwasatthistimeoneyearago,althoughthisactivityhasnotyetmaterializedintoannouncements.ThecharacterizationwegaveinourQ12024HealthcareServicesReportwasbroadlyconfirmedattheconference:Sponsorsaremoreactivelyworkingoninvestmentthesesandareseeingmorebankers’books.Atthesametime,dealtimelines arelongandhalting.Attheconference,wecontinuedtohearofyear-longandbrokenprocesses. Wemaintainthatarate-cuttingcyclewillbethekeyimpetusforanincreaseindeal activity—aslongascutsappearimminent,itistootemptingtowaitforamorepositiveandcertainenvironmenttoexitinto. Sincelastyear,wehavemaintainedthatarate-cuttingcyclewouldbethekeyimpetusforanincreaseindealactivity—aslongascutsappearimminent,itistootemptingtowaitforamorepositiveandcertainenvironmenttoexitinto—andthisviewwasechoedfromthemainstage.TherewasalsosomediscussionofthepossibilitythatsponsorsmaybegintocuttheirlossesandpullthetriggeronexitsiftheFederalReservefurtherdelaysratecuts(thatis,pasttheendof2024).Weacknowledgedthisasakeyvariableinour2024HealthcareOutlook.Thetippingpointwillbewhenafewlarger“B”assetstradefollowingthebeginningofarate-cuttingcycle.Thiswillsolidifythenewmarket-ratepricingandforcesellerpricingexpectationsbackdown. Inthemeantime,GPscontinuetofocusontheirexistingportfolios,pullingoperationalleverstoincreasefreecashflow,proactivelypayingdowndebt,andrunningintegrationandvaluecreationplaybooksthatmayhavefallenbythewaysideinamoreactivedealenvironment.Forinstance,ontheheelsoftheChangeHealthcarebreach,ClearwaterComplianceisseeingincreasedsponsorinterest inportfolio-widecybersecurityreviewsandhasalsobeguntosellmorecloudmigrationservicestoPE-backedhealthcarecompaniesseekingtomodernizetheirdataarchitecture.ContinuationfundsandpartialrecapscontinuetobeapopularoptiontoprovideliquidityasLPsclamorfordistributions. Thelender’spanelmadeitclearthatthefinancingenvironmentisbecomingslightlymorebuyerfriendly,especiallyintheupperhalfofthemarket.Thebroadlysyndicatedloan(BSL)markethasbeencrackingopeninrecentmonths,firstforrefinancings,andmorerecentlyforLBO-relatedissuance.IntheBSLmarket,pricinghascomedownslightlyandleverageratiosarebackupto5.0xto5.5xEBITDAor higherinafewcases(comparedwith4.5xto5