Private equity is piling into health care

LAST month KKR, a private-equity firm, announced that it would buy Envision Healthcare, one of America’s largest providers of doctors to hospitals. The deal was valued at $9.9bn, including debt. If shareholders agree to the sale, it will be the largest in a string of health-care investments by KKR, including an ambulance service, a company that helps treat children with autism and a maker of medical devices.

“Ten years ago only a few private-equity houses had dedicated health-care teams,” says Dmitry Podpolny of McKinsey, a consultancy. “Today nearly everyone does.” Last year saw a frenzy of deal activity, the highest by value since the go-go year of 2007.

Private-equity funds are not the only ones keen on the industry. Institutional investors, tech-focused funds, generalist asset managers and corporate buyers are sniffing around, too. As they chase a limited number of targets, they are pushing up prices. Not high enough to dampen interest, however: health care is loved by...



via The Economist: Finance and economics Business Feeds

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