Craig Castelli
Appearances
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
The positive in this is the last time we saw hold periods reach a level like this was around 2012, 2013. I don't have the chart in front of me to give you the exact year. But what followed that? We all remember what M&A was like from 2013 or 14 through the pandemic. It was just a boom year over year over year of growth.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
And obviously, we all learn that history doesn't necessarily, you know, it's not necessarily guaranteed to repeat itself. You know, we should all have optimism that eventually things are going to shake loose, whether it's
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
exits or, you know, recaps into continuation funds or, you know, any other vehicle that, you know, gives it both a portfolio company and a fund, you know, increased liquidity to get back up there and make acquisitions. You know, that's really what's been lacking in some of the more mature areas of healthcare services the last couple of years. I'll introduce a new topic here as well.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
So I don't just repeat what everybody else has said. The other trend I wanted to highlight was behavioral health integration across broader areas of healthcare services. We're starting to see just as everybody
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
you know universally is increasingly aware of behavioral health needs and the the specific um shortage of providers and we have a real supply demand mismatch between the demand for services and the supply of providers we're starting to see um you know family practices women's health practices pediatric practices increasingly add mental health services to their offering
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
I think that's an incredible opportunity for anybody who's building a business, either entrepreneurial or a private equity firm who's making a play in one of these categories and looking for a way to differentiate themselves.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Thanks, Scott. Craig Estelli, Caber Hill Advisors, founded the firm 11 years ago. We're a lower middle market investment banking firm. We primarily advise founders and owners of lower middle market companies. About half of our business is in healthcare and the bulk of that is within healthcare services. physician practices, dental practices, service providers to those practices.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
But I think it's one of those opportunities that creates an everybody wins scenario because if the ultimate outcome is better access to care and better acceptance of some of these challenges, then it's a win for society and and kind of the ultimate outcome of doing well by doing good.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Within behavioral health, for me, it's everything pediatric, whether it's autism services or just simple psychological counseling, therapy, ADHD, other kind of more traditional behavioral-oriented practices that aren't as severe necessarily as autism. There's still a tremendous shortage, but also a big opportunity.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
And oftentimes we're advising them on the journey towards growing the business and ultimately transacting with private equity. So great to be here today. And I'll give a plug really quick that Scott asked me to make. We conducted a survey last fall of private equity partners on their outlook for M&A in 2025. You can find that on our website at caperhill.com.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Spoiler alert, everybody's excited for a big year.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
I think it depends on how you want to define hope. I don't think they're stuck in so far as there is no buyer for a business like that because that is a business that could still be sold. It just may not be sold at a price that generates a gain for any of the shareholders. That may be better...
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
or at least create a better opportunity long run for any employee shareholder, any of the doctors, and then it does the outside investors because the doctors could potentially just keep their equity in the business and hope that the next partner is a better steward of the business and guides them to the promised land. But as you said, it's going to depend on a lot of factors, how...
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
How old or how mature is the fund that holds the company? If this was the first portfolio company, there may be more patience to grow their way out of this than if you're in year 10 or 11 of the fund, you're the last company standing and they just need to liquidate it because they need to close the fund and return capital to shareholders. So I wouldn't want to be in this spot.
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
I wouldn't want any of my clients to be in this spot. I don't think that there is a silver bullet that solves this thing for anybody in the
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
Sure. You know, it's funny. I think, you know, subconsciously we must have all gotten together before this webinar because my list resembles what's already been stated. I talk about old periods all the time. And, you know, you've mentioned the DSO space a bit, Bart and Scott, you touched on our experience in dental. I mean, I think
Becker Private Equity & Business Podcast
2025 Healthcare Private Equity Deal Trends 2-11-25
That is really the clearest example, partially just because there's been so much investment in that space. But we've seen a number of well-known assets grow long in the tooth. There have been some notable successes and notable struggles just in recent years alone. But if you look just across the broader private equity marketplace, hold periods are rising everywhere.