Duncan Morpeth on LinkedIn: Healthcare business shapes up for growth with £8.25m investment |… (2024)

Investors need to be able to distinguish between financial stress caused by near-term operating disruptions and longer-term competitive challenges, and should also be on the lookout for transformative transactions like mergers or joint ventures that could have a long-term impact on credit strength.

1

HETI RIPORT #BlackstonePrivate equity firm BPEA EQT and Ontario Teachers’ Pension Plan Board are among firms considering a deal to acquire Aster DM Healthcare Ltd. assets including its India business, according to people familiar with the matter.BPEA EQT and OTPP have expressed preliminary interest in the hospital operator’s business in the South Asian nation, the people said. A deal would help the investors tap into the growth potential of health-care services in the country, the people said, asking not to be identified because the matter is private. Others interested in potential bids for Aster’s India business include Blackstone Inc. and KKR & Co., the people said.https://lnkd.in/dPq5zDfz

5

The Peterson-Milbank Program for Sustainable Health Care Costs helps bring transparency to statewide healthcare spending and transactions. Participating states like Rhode Island set cost growth conditions on mergers and acquisitions to limit rising healthcare costs.Learn how states are taking action to prevent unsustainable cost increases from healthcare transactions in Modern Healthcare: #HealthcareCosts #DataTransparency Milbank Memorial Fund

7

We know that private equity (PE) in healthcare is increasingly coming under fire, and with good reason. But vilifying PE in healthcare for the sake of villifying PE, without actually backing up criticisms with real data and concrete examples of the harm caused, is not necessarily valuable. So, here is some data as well as concrete examples. In 2023 alone, a shocking 21% of healthcare company bankruptcies were tied to these financial predators. PE bankruptcies in healthcare have exploded 112% in five years. PE firms buy healthcare companies, saddle them with unsustainable debt, strip their assets, and when these companies inevitably collapse under financial strain, they leave chaos in their wake—job losses, diminished care, and shuttered facilities.These are not victimless crimes. Envision Healthcare, owned by KKR, crumbled into bankruptcy, displacing thousands of employees and compromising crucial medical services. The Center for Autism and Related Disorders, swallowed up by Blackstone, went bankrupt, abruptly cutting off services for countless vulnerable patients. PE ownership was linked to 20,000 premature deaths in nursing homes over 12 years, according to the National Bureau of Economic Research.These are not isolated incidents but patterns of a systematic onslaught on healthcare by PEs relentless rapacity.The infuriating reality is that while healthcare companies buckle under excessive debt, PE moguls make billions by exploiting various financial strategies to maximize their profits. Dividend recapitalizations (loading companies with debt to fund dividends back to the PE firm), increases returns but also company debt. They also exploit interest deductibility to lower taxable income by deducting interest on borrowed funds. Management and monitoring fees are extracted as additional revenue streams, often prioritizing them over other company needs. PE firms asset strip, often leasing back valuable assets in order to extract cash while saddling the company with ongoing lease payments. Lastly, they use the step-up in basis tax provision to reduce capital gains taxes on assets sold, by resetting their tax value at the time of purchase. These maneuvers illustrate how PE firms legally manipulate financial and tax rules, often to the detriment of the companies they acquire.Abuse of the bankruptcy system isa the final exploit, a calculated escape hatch that allows them to walk away unscathed while the companies, employees, and patients they've burdened suffer the consequences. In many cases, and in increasing frequency, PE firms profit from their financial engineering while leaving behind a trail of human and economic devastation.

274

56 Comments

The Financial Times ran a story today on the front page about private equity participation in the UK healthcare industry. (It was great to be quoted!). It really is a necessity as demand continues to be unmet. There will be those who resist such participation of 'commercial' operators in such a 'social' space, but the strategic and tactical discipline and related high levels of governance imposed on portfolio companies by their backers and the drive to create sustainable and enduring businesses in the long term for future owners means that private equity capital should be welcomed as enablers of effective and suitable operators.Charlie Jolly Suneel Gupta Ros Pontifex RSM UK Matt Wolf Michael Haas, MBAhttps://lnkd.in/enu6HZsX

77

4 Comments

Healthcare-related assets make up a significant chunk of potential dealflow in the GP-led secondaries market given the sector’s characteristics and outlook: https://okt.to/VoSrYd#privateequity #secondaries #PEIhealthcare

The nation’s private equity fund assets havemore than doubledover the past 10 years, totaling$8.2 trillionlast year. A recentreportfrom the American Hospital Association shows that private equity firms account for 56% of all physician practice acquisitions since 2019. This is concerning with private equity firms accounting for more and more physician practice ownership.“My Corporate Crimes Against Health Care Act would prevent what happened with Steward from ever happening again,” Warren said in a statement. “When private equity gets hold of health care systems, it is literally a matter of life and death, so if you drive a hospital like Steward into bankruptcy, putting patients and communities at risk, you should face real consequences.”If passed, the act would establish a new criminal penalty of up to six years in prison for private equity executives whose business decisions result in a patient’s death. This is an important provision in the proposed act- Should a healthcare portfolio company experience serious, avoidable financial difficulties as a result of their private equity ownership, the bill would allow the Department of Justice and state attorneys to claw back all compensation issued to private equity and portfolio company executives within a 10-year period before or after those financial difficulties begin. There would also be an associated civil penalty of up to five times the clawback amount, the bill stated.This summarizes the "grab the money while you can" mentality of PE companies: Mona Shah,Community Catalyst’s senior director of policy and strategy, stated that private equity is a “metastasizing disease” that continues to harm the country’s healthcare delivery system.Time to hold PE firms in healthcare accountable to residents, patients, and the community. Look what Stuart Healthcare did to their hospitals in MA. https://lnkd.in/d6hGNShK#PE, #privateequity, #getitwhileyoucan, #moneygrab, #grabitwhileyoucan, #profitsfirst

3

The#FTC,#DOJ, and#HHSare seeking public comment on transactions by private equity funds, private credit funds, and real estate investments in healthcare by May 6, 2024.Learn more about their request for information in our alert.#RFI#PrivateEquity#Healthcare

2

Blackstone, BPEA EQT, Ontario Teachers' Pension Plan, KKR consider $2.5bn deal to acquire Aster DM Healthcare. Its Gulf assets may fetch about $1bn, while the Indian business could be worth around $1.5bn. A deal would help the investors tap into the growth potential of healthcare services in India, where Aster operates 33 hospitals and hundreds of clinics and pharmacies. Aster shares soared as much as 9.6% on Thursday, the most in three months. The Moopen family controls about 41.9% of Aster's shares, and the company has been working with advisers to hive off its business in the Gulf. On the other hand, Dubai-based private equity firm Fajr Capital is part of a consortium seeking to buy a majority stake in Aster’s Gulf business. #PEInsights #privateequity #acquisition #healthcareindustry

327

Poster child for what private equity acquisitions in healthcare can produce. If you aren't close to this topic, this article gives you a "crash" course (literally).#healthcare #hospitals #PrivateEquity #SelfInflicted #LegalizedCorruptionhttps://lnkd.in/gkPuZutm

9

4 Comments