In 2020, alongside most other industries, mergers and acquisitions took a nosedive as the COVID-19 pandemic took hold worldwide. Businesses were cautious, wanting to be careful in a plummeting economy and a once-in-a-century emergency. However, the industry recovered rapidly, and there is now a flurry of activity as investors seek new opportunities across a wide range of industries.
Healthcare is one of the most attractive industries for investors. No matter what happens in the economy, people need to care for their health. That means that even during recessions, these businesses typically remain profitable. Physical therapy is particularly ripe for investment, as it is highly fragmented, with more than 16,000 clinics across the United States. By acquiring PT clinics, investors can take advantage of economies of scale. In all industry subsectors, healthcare m&a is making a difference for patients and investors alike.
Mergers & Acquisitions are a Big Opportunity
2021 was full of mergers and acquisitions in the healthcare and health tech industries, but there is still much room for more growth. Hospital mergers have been taking off for years, as local hospitals consolidate into a few networks. These mergers result in higher profits for the shareholders. Like hospitals, there is room for consolidation in many other subsets of the healthcare industry.
Mergers and acquisitions happen for a couple of different reasons. Typically, they result from an investor or private equity firm looking to invest their capital or an existing business looking for economies of scale. Like hospital mergers, mergers in any other industry result in increased profits and improved service.
For example, a restaurant owner can open a second restaurant without doubling their expenses – they can use the same payroll, accounting, and other back-end systems. They will get increased profits from the second location without the associated increased costs. In all industries, economies of scale lead to greater profits.
Mergers and acquisitions allow businesses and investors to take advantage of those economies of scale without the months or even years it can take to open and grow a new business. They can simply purchase an existing successful business, allowing that business owner to retire or move on to another opportunity while taking advantage of those economies of scale. Healthcare m&a means that patients have a better chance of working with a brand they trust in a convenient location while simultaneously providing profit opportunities for investors.
Why Invest in the Physical Therapy Industry?
If you are looking for an industry to invest in, physical therapy is the right choice. There is a surprising amount of fragmentation in this industry. There are more than 16,000 outpatient clinics in the United States. Currently, no individual provider owns more than 10 percent market share in this industry. Many clinics are owned and operated by a single practitioner. This means there is room for investors to scale and leverage brand equity rapidly.
The physical therapy sector is growing quickly. As the American population ages, demand for physical therapy is expected to rise. Adults over 65 account for about a third of physical therapy patients. They are expected to make up a larger portion of the population in the future. Estimates place it at close to 20 percent in 2030, up from 12 percent in 2000. As the population ages, demand for physical therapy, which helps people stay active and healthy, will increase.
If you want to invest in healthcare mergers and acquisitions, physical therapy is the right place to look. The cost to provide care is much lower than in many other forms of healthcare, as there is no expensive technology involved. It is also becoming more popular as other forms of healthcare are increasing in cost. Your investment in physical therapy mergers and acquisitions will result in impressive returns.
Provident Healthcare Partners is Your Trusted Advisor
To take advantage of all of the opportunities available in the physical therapy sector, work with Provident Healthcare Partners. We have been providing investment banking services for over two decades and are experienced in the physical therapy sector. We have developed industry-leading expertise in healthcare mergers and acquisitions and can equip you with the knowledge you need to succeed. Provident will create a transaction strategy that stays true to your unique needs and gets the best possible outcomes.
If you have any questions about investing in mergers and acquisitions with the support of Provident Healthcare Partners, reach out to us today. We look forward to helping you succeed in the physical therapy industry.