Bart Walker
Appearances
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Yeah, I think that's the big question, as you put it. Will these cuts really come through? I think the goal is admirable. I think the tool they're using is – potentially questionable. I'm curious to see how many of these executive orders actually stick at the end of the day.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
But if they do, I think you'll start to see the funds really are drastically cut from some of these core areas where you start to cut not just fat, but you cut into muscle and bone. I think people will start to feel the pain and there'll be some pretty immediate feedback from the market on that, particularly the consumers. And I would expect that it'll level out at some point. Sometimes you have to
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
tear some things down and do some demo before you renovate a house. And I, I understand that. Um, but we have, we can't forget that these are people's real lives and health that we're talking about. So ultimately I I'm, I'm optimistic that it'll, it'll come to a more principled place, but in terms of impact on the private equity community, I think it's very much a wait and see.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
I don't, I don't think you're popping down a bunch of cash on something that has heavy Medicare Medicaid exposure until the dust settles just a little bit. Um, but again, on a long enough term timeline, um, the demand for those services is so great. I think it's hard to leave it unfunded for any period of time.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Thanks, Scott. Bart Walker, a partner with McGuire Woods. I am one of the co-chairs of our healthcare industry team. And that capacity, I have oversight over our go-to-market strategy across the departments within the firm and the healthcare and life sciences space. My practice is almost entirely healthcare M&A.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Most of that's PE-backed healthcare services with some pharma and pharma services sprinkled in. So in a nutshell, that's my practice. Very similar to Holly's practice, as you'll hear.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Sure. Thanks, Scott. The one I'd focus on are exit strategies. We have a lot of private equity fund investors who have investments that are getting pretty long in the tooth that they've not been able to see a liquidity event from and return capital to their LPs.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
So one of the things we're looking at is alternative structures to that as opposed to traditional LBOs or selling to a bigger private equity fund has been the traditional strategy of middle market funds. So a couple of just tangible examples of that.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Late last year, Sencora, which was formerly Amerisource Bergen, acquired 85% of Retina Consultants of America for about $4.4 billion and another half a billion deferred purchase price. So that's an interesting example of some crossover where you're seeing some strategics get involved on the buy side of a lot of these transactions. Second, I'm seeing some thawing in the dental space.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
A big part of my practice is working with dental services organizations. And last year, and this is publicly announced, I'm not sharing any secrets, but MB2 got an investment from Warburg Pincus, which is another, I'd say, unusual player. That's not your traditional exit kind of, end-stage type PE fund.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
And then the last prong of that trend, I'd say, that's a little bit different in recent years has been the use of continuation vehicles or secondary sales within a private equity fund, where it's the same private equity firm transferring from one fund to another fund, sometimes a different mix of limited partners in the second fund.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
But those types of deals raise some really interesting legal issues around allocation of risk, how you divvy up liabilities, fiduciary duties, a whole host of just really interesting legal things that you typically just don't see in a traditional LBO structure.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Yeah, that's the game is, you know, they'll buy a platform, they'll increase profitability, they'll grow it through add-on acquisitions and organic growth, but they typically have an investment horizon of three to seven years, usually three to five years. We're now on the tail end of that kind of five to seven year range for a lot of the investments.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
So absent another waiting private equity fund buyer, like the kind of upstream blue chip funds, like, yeah, Blackstone, KKR, kind of the top of the food chain, PE funds, who are the usual suspects in the buyer market. They're looking for some different ways to get liquidity to their LPs.