Assessing the Headwinds in the Healthcare Provider Consolidation Process With Mark Francis of Houlihan Lokey

The Corner Series

The difficulties faced by healthcare provider consolidations could be temporary or they could indicate a long-term decline in the attractiveness of consolidation. Some challenges, like high debt and labor market imbalances, are temporary and don't reflect the fundamental quality of the businesses involved.

On this episode of The Banker’s Corner, McGuireWoods' Geoff Cockrell is joined by Mark Francis, Managing Director and Global Head of Healthcare Investment Banking at Houlihan Lokey. The two discuss the future of healthcare provider consolidations through the lens of those working in the industry right now.

Over the past six to eight months, some larger platforms that had been acquiring smaller companies have paused their acquisition activities due to a disconnect between seller expectations and current valuations. They were also waiting for more favorable credit conditions and pricing adjustments. Now, these platforms are beginning to look to the market again and see what is available.

Geoff and Mark discuss the healthcare sector’s resilience during economic slowdowns. Healthcare is often less volatile than other sectors, making it an attractive option for investors looking to allocate funds during economic uncertainties.

Healthcare is a mature market, but new interest in private equity has led to a reshuffling of focus within sectors. Some sectors like healthcare technology, veterinary care, and behavioral health remain highly attractive despite varying trends in their valuations.

Later on in the episode, Mark and Geoff discuss valuations and the importance of running and operating integrated businesses. “Great companies get great valuations, and we can debate what great is, but if people don't feel good about the valuations, largely they're not trading,” says Mark.

Featured Guest

Name: Mark Francis

What he does: Mark is a Managing Director and Global Head of Houlihan Lokey’s Healthcare Group. He has nearly 25 years of experience in M&A and financial operations in the healthcare industry and has managed a wide variety of projects, including divestitures, financial restructurings, joint ventures, and strategic alliance formation.

Organization: Houlihan Lokey

Connect: LinkedIn

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