M&A Market Trend: More Healthcare M&A Deal After COVID-19
Despite the impact of the COVID-19 pandemic in global M&A activity, more healthcare and life science deals are expected to continue to grow. VCs and PEs are shifting towards the healthcare and life sciences transactions.
M&A transactions were decreased significantly during both the dot-com bubble and the financial crisis. Therefore, a short-term decline in M&A activity as a result of the COVID-19 pandemic seems highly likely for the rest of the year. However, the impact of the pandemic may also propel M&A activity in some areas, including healthcare sector.
More Healthcare M&A Deals After COVID-19
This COVID-19 pandemic is not just impacting the financial system generally, the valuation of sellers, and the appetite of buyers to get deals done in the short term, but on a multitude of other factors affecting M&A deals. These include deal terms themselves, new due diligence issues that have arisen, the manner in which due diligence is conducted, the availability, pricing and other terms of deal financing, and the time it will take to obtain necessary regulatory and other third-party approvals for transactions.
I’ve researched on current investment trends which are primarily focused on biopharma technology companies. Law firms and as well as investment firms advise on investing in biopharma industries and many of them have successfully gotten into IPO:
- Dealflow investment market has shifted towards related to health, sport, etc. Bain Capital has invested in sports analysis software firm (Hudl) and has made a growth investment in Boradstep Behavioral Health, a provider of programs and services to individuals living with intellectual developmental or behavioral disabilities
- Bain Capital Life Sciences has led a $215 million Series D financing round in Atea Pharmaceuticals, which recently received FDA approval for an investigational coronavirus treatment drug.
- Bain Capital and Cyrus Capital Partners are competing to buy the assets of airline Virgin Australia Holdings Ltd., an Australian limited partners which filed for bankruptcy because of difficulties caused by the coronavirus pandemic, according to a Tuesday report from the Wall Street Journal. According to the report, the two private equity firms have been selected as “top contenders” for the company’s assets. Virgin Australia, the second largest carrier in the country, was already struggling before the global pandemic hit, and its troubles became even more pronounced once air travel ground to a halt in the wake of the outbreak, the report said. No potential price tag was disclosed.
- Bain Capital Double Impact has made a growth investment in Broadstep Behavioral Health, a provider of programs and services to individuals living with intellectual, developmental or behavioral disabilities.
