Q4 2023

Specialty Healthcare Services M&A Update

In Q4, the S&P Health Care Services Select Industry Index increased 6.8% and was outperformed by the S&P 500, which increased 11.2% over the same period.
The median EV/EBITDA multiple for reported private equity deals increased to 22.4x in 2023 from 16.7x in 2022, and increased for strategic deals to 18.2x from 12.7x in 2020 (the last year with reported multiples).
M&A deal volume in the sector increased 18.2% to 91 completed transactions in Q4 compared to 77 deals in Q3, but decreased 41.3% from 155 deals in Q4 of the prior year.
As a % of total capital invested in M&A transactions in 2023, PE participation decreased to 17.1%, down significantly from 32.2% in the prior year.
North America was the most active region in Q4 with 66 deals. Most notably in the North American market was Thoma Bravo’s acquisition of NextGen Healthcare through a $1.8 billion public-to-private LBO in November 2023.