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The Healthcare Sector – Opportunities & Challenges

11 July 2022

The Healthcare industry has been one of the most severely impacted industries by the Covid-19 pandemic.

Improvements in operational and financial transformation have been necessary for the industry to succeed.

Demand for non-Covid-19 related medical care plummeted as patients postponed elective care in attempts to avoid contracting the virus. Healthcare professionals were also prioritising their focus on dealing with the pressing issues of the pandemic. The long-term effects of this period for other conditions will surely be borne out in future years.

Healthcare now has an opportunity to innovate and revitalise itself going forward in the wake of the pandemic. Remote working, virtual medical appointments combined with a shortage of supplies and staff have caused huge challenges over the past two years. However, they now present opportunities for the sector. The change in consumer preferences, clinical innovation and ground-breaking new digital technologies will all encourage an ever-increasing pace of this change.

Increased public attention and Government recognition will also help to increase awareness and tackle underlying public health issues. In order to capitalize on this opportunity, companies in this sector will need to respond quickly. 

The above graph shows that the number of North West deals completed in the Healthcare sector was significantly affected by the Covid-19 Pandemic during 2020. With many deals (6) completing in Q1 2021.

Healthcare Professionals

Healthcare professionals have experienced the toughest period of their working careers throughout the pandemic. It has resulted in a high level of mental health absences. As a result of this exacerbated professional stress (Source: 2020 NHS Annual Survey Results).

The industry must respond fully to support the mental health of their employees. Companies who place this at a premium will have a competitive advantage in retaining key talent. In particular, the youngest members of staff have reported high levels of burnout recently.

The healthcare industry will need to ask itself the following questions in the immediate future:

  • How to demonstrate and achieve results in improving the mental health and wellbeing of their staff and the communities they serve?
  • How can mental health and wellbeing systems be integrated into existing care offerings?
  • How can health and wellness incentives be coordinated with prevention?

Key Benefits

At DTE Corporate Finance, we have worked with multiple Healthcare companies. Many of whom are now exploring acquisition opportunities. In order to broaden and diversify their business offerings after emerging from the pandemic strongly positioned.

The cost of acquisitions have become increasingly more expensive, with deal multiples far exceeding those achieved in the previous decade. The median deals are 20 times Enterprise Value (Source: Bain & Co).

Acquisitions with high valuations, however, are increasingly dependent on acquirers’ ability to see synergistic benefits in their deals.

How can we help?

Our team have extensive experience in carrying out a full range of Due Diligence, Lead Advisory and Business Valuations across the Healthcare sector for a variety of purposes.

Please contact us on 0161 819 1910 to discuss your business requirements.

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