Healthcare

The Healthcare sector has traditionally encompassed two separate industry groups. The first industry group includes companies that primarily manufacture healthcare equipment and supplies or companies who provide healthcare services. This also includes distributors of healthcare products, providers of basic healthcare services, as well as owners and operators of healthcare facilities and organizations. The second industry group primarily involves research and development, production and marketing of pharmaceuticals and biotechnology products. Historically, this sector has benefited from healthcare reform in the U.S., which has been the driving force for hospitals and other care providers to realign their operations to accommodate millions of previously uninsured Americans and comply with new regulatory requirements. The reform boosted demand for the Healthcare sector services and increased gross patient volumes, thus bringing more business to every corner of the Healthcare sector.

 

Value of Closed Domestic M&A Transactions ($mm)

 

Sector Performance vs. National GDP

Mergers & Acquisition (M&A) trends are looking optimistic despite a slow start in the first quarter of 2016. With an increasingly aging United States population, as well as the continuation of improved technology and medical advancements, the Healthcare sector can be expected to have increased growth and transactions. After the recession, many companies focused on stabilizing their financial position which now leaves them with plenty of cash reserves and funds for expansion. With the economy steadily improving over the last several years, greater confidence will lead to more firms seeking to pursue acquisitions. Mergers and acquisitions provide a competitive edge in the current market, which is a necessary edge to have in the Healthcare industry where medical discoveries are constantly occurring. It also captures a larger targeted consumer base by expanding past current markets. There will always be a demand for healthcare, regardless of how the economy is performing, as the need for medical treatment will always exist.

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