Q2-2019 Private Equity Industry Update

Long-term fund performance has remained strong this year with an increasing number of firms entering the market. Dry powder in the European and North American markets is currently at a new high of $1.54 trillion. Despite the high amount of available capital to be deployed, M&A activity has experienced a slower first half of the year in comparison to 2018. In Q2 of this year, 244 funds have closed globally, which is down from 399 in Q2 of 2018. Additionally, buyout investments in North America recorded its lowest aggregate deal value amount since 2017. ​

Lower deal volume is likely due to market uncertainty regarding fiscal policy and today’s high valuations. For North America and Europe in particular, the potential for rising interest rates has made investors hesitant to transact. Higher valuations may also be leading certain buyers to wait for a correction before deploying capital.​

In regards to future outlook, Provident believes that M&A activity still has the capacity to grow in the second half of 2019 as sellers seek to exit while purchase multiples are high. This is even more likely to occur in the healthcare services sector where the industry is projected to continue attracting funds looking to establish platforms and consolidate practices in highly fragmented subsectors.

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Sources: SEC Filings; Company Press Releases, and Reports; IBISWorld; Capital IQ; PHP Estimates and Research. This document has been compiled with publicly available information. Provident Healthcare Partners, LLC makes no guarantee of its accuracy or completeness. No data or statement should be construed to be a recommendation for the purchase, sale, or retention of any security.
  • “Provident listened to our story, confirmed that our business was valuable and made us feel like this was the only transaction important to them.”

  • “After working with Provident on several transactions, it is evident that their extensive industry knowledge and deal expertise prove to be invaluable to their clients.”

  • “We would not have been successful navigating the process without Provident’s hard work and active participation. They exceeded our expectations and we would highly recommend them to any health care company seeking a knowledgeable and engaged investment banking firm.”

  • “A lot of investment bankers were interviewed, Provident was chosen. Provident delivered. My clients could not be happier.”

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  • “While the decision to sell our business was a difficult one, Provident vigilantly represented and protected our best interests throughout the transaction.  Provident was the right choice for Cascade and I would recommend their services to anyone.”

  • ”I have a tremendous amount of appreciation and gratitude to the Provident team for their hard work and diligence throughout this process. Each and every member of the Provident team is excellent at their jobs and it has been a pleasure working with such a professional team. Provident has provided outstanding guidance and counsel, and this deal could never have gotten done without Provident’s leadership.”