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August 08, 2023 | Insights

Healthcare IT Industry Report

Bowen has released its Healthcare IT Industry Report focused on deal activity under current market conditions. The report leverages Bowen’s industry expertise and in-depth M&A knowledge to analyze the Healthcare IT industry and identify areas of opportunity.

Venture capital deal flow declined materially from highs in 2021

Deal volume has been restrained by material macro events

Global M&A activity remains subdued through early 2023
- Material macro events, including bank collapses and debt limit concerns, have shaken investor confidence and driven a more measured distribution of capital
Despite Market instability, high-quality companies are still trading for attractive multiples
- Buyers are prioritizing profitability and stable growth while limiting debt levels and shunning high-burn operations
- Cash reserves at PEs remain close to record levels leading to the likelihood of a pickup in PE acquisitions through the second half of the year
Funding opportunities are more limited, with VCs withholding additional capital to support existing portfolio companies
- Companies funded at peak levels will need to adjust to the current valuation reality when raising additional capital
- To mitigate risk, VCs are shifting towards companies with proven economic models, short and predictable sales cycles and defined and measurable payback periods
Bowen expects significant private-to-private M&A activity
- Companies that would have previously been funded may pursue mergers to achieve sufficient scale and be at or close to profitability