By Tom Schramski, PhD, CM&AA and David E. Coit, Jr., DBA
Volume 3 Issue 4 February 16, 2016
Based on the healthcare market cycles of the last 40 years, including the Great Recession, we have been conditioned to believe the bottom eventually falls out of every sector. Yet, despite the eroding value of many commodities and world stock markets, healthcare investment, including M+A transactions, remains strong.
The just-released GF Data® M&A Report suggests that private equity healthcare deal activity was robust through 2015 and, in some strata, as vibrant as it’s been for some time. For example:
GF Data’s® approach is noteworthy because of the rigor with which their data is collected. While it doesn’t address the next lower range ($2-10 million TEV where the multiples are often 4-5.5x), it matches closely our own experience in 2015 as well as healthcare deal valuations well into our pipeline for 2016.
Yes, it would be folly to believe there is little risk ahead, but we remain optimistic because of the unique nature of our healthcare marketplace. While we are bedeviled by unnecessary regulations and old practices, the flip side is an extraordinary opportunity for entrepreneurial innovation.
The ride has just begun.
David is a seasoned commercial and corporate finance professional with over 30 years’ experience. As part of the VERTESS team, he provides clients with valuation, financial analysis, and consulting support. He has completed over 150 business valuations. Most of the valuation work he does at VERTESS is for healthcare companies such as behavioral healthcare, home healthcare, hospice care, substance use disorder treatment providers, physical therapy, physician practices, durable medical equipment companies, outpatient surgical centers, dental offices, and home sleep testing providers.
David holds certifications as a Certified Valuation Analyst (CVA), issued by the National Association of Certified Valuators and Analysts, Certified Value Growth Advisor (CVGA), issued by Corporate Value Metrics, Certified Merger & Acquisition Advisor (CM&AA), issued by the Alliance of Merger & Acquisition Advisors, and Certified Business Exit Consultant (CBEC), issued by Pinnacle Equity Solutions. Moreover, the topic of his doctoral dissertation was business valuation.
David earned a Doctorate in Business Administration from Walden University with a specialization in Corporate Finance (4.0 GPA), an MBA from Keller Graduate School of Management, and a BS in Economics from Northern Illinois University. He is a member of the Golden Key International Honor Society and Delta Mu Delta Honor Society.
Before joining Vertess, David spent approximately 20 years in commercial finance, having worked in senior-level management positions at two Fortune 500 companies. During his commercial finance career, he analyzed the financial condition of thousands of companies and had successfully sold over $2 billion in corporate debt to institutional buyers.
He is a former adjunct professor with 15 years' experience teaching corporate finance, securities analysis, business economics, and business planning to MBA candidates at two nationally recognized universities.