Global Healthcare M&A and Capital Markets Q3 2023 Review

The global healthcare market witnessed a surge of deals in 2023 as dealmakers returned with the intention to stay ahead of the deal curve. Even though investors and acquirers were speculating about a quieter summer, deal activity was robust in Q3, reaching an extraordinary peak in August. The COVID-19 knock-on effects, labour force displacement, geopolitical unpredictability and liquidity scarcity that dominated talks last year has stabilized to a certain extent, thereby providing a conducive environment for deal making. The ability to identify, negotiate and realize value from increasingly complex partnerships and alternative collaboration models continues to drive deal making and serve as a key competitive advantage.

The sector witnessed numerous 'big ticket' agreements as well as solid deal closures, both of which are expected to drive investors’ confidence and set the tone for the remainder of the year. The volume of deals withdrawn this year is extremely low, a stark contrast to that of last year, which saw deals taken off the market on account of geo-political and economic uncertainties. Dealmakers continue to amend their strategies to bridge the valuation gaps and are conducting deeper analyses of the targets, thereby extending duration of negotiations and due diligence.

Key M&A sentiments observed during the year:

  • Lower valuations and heightened boardroom CEO confidence across healthcare subsectors are driving increased transaction levels
  • Portfolio realignment is happening among the strategics to divest non-core or under-performing assets; the proceeds of which are expected to be used in ramping of R&D, technology, and scale
  • Rapid paradigm shift towards utilizing data and actionable insights to implement person-centric network/product strategies across sub-sectors
  • Uncertain geopolitical environment and higher interest cycle continue to put pressure on justifying synergies and ROIs
  • Sponsors being cautious and revising their expectations to factor in the changing deal making landscape with lower valuations justifying ‘firepower’ deployment during the year
  • Scarcity of initial public offerings has made sale processes the primary investor exit method
Arjun Paul
Manager, Corporate and Investment Banking LoB Posts

Latest Posts