Healthcare Private Equity in 2025: Navigating the Pause with Amber Walsh of McGuireWoods LLP 4-16-25

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Becker Private Equity & Business Podcast 10 min 4 speakers 5 chapters transcribed

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Who is Amber Walsh and what is her role in healthcare private equity?

0:52

Amber, why don't you take a second and introduce yourself and then let's dive into what you're seeing in the healthcare private equity deal market. Thank you, Scott. Like you said, Amber Walsh, Healthcare Transactions Partner at McGuire Woods. I love looking at all the data that comes back in every quarter reported from a variety of sources. It's all crunched in different ways by different reporting bodies.

What are the key trends in Q1 2025 healthcare private equity dealmaking?

1:19

I love looking at that and comparing it to one, what we were expecting coming into that particular quarter, and two, what it feels like now that we're well into the quarter after. And I think it's a mixed bag from Q1 2025 Healthcare Private Equity Dealmaking. I think the theme for the true Q1 all the way through the end of March was the continued cautious optimism that That was the theme really throughout much of 2024 and early 2025. The data kind of plays out. I'll share that in a minute. But just in the past several weeks, there's been more discomfort. There's been a little bit more pausing midstream on some deals that were in motion. Definitely feeling of insecurity with volatility. None of that should be surprising to anyone. We all see it.

2:19

It's the biggest talked about concept in the news and the market reactions. And it's playing out that way in this early part of Q2. But Q1 did end up. So as you compare Q1 2025 numbers to 2024 numbers, They are as expected outside of the hospital market, which was pretty chilled, and a couple of other sectors, digital health and technology.

How did healthcare private equity deal activity in Q1 2025 compare to 2024?

2:48

But depending on whose report you're looking at, ECG has a healthcare M&A report on number of deals. They also have a healthcare private equity component. The number of deals are up there. AlphaBridge is across the board PE, not just healthcare, number of exits up. KPMG's M&A-Report in terms of sheer dollars in healthcare deals up again. But like I said, that only tells part of the story, but at least that was reflective of more activity in Q1 before we really hit the end of Q1, where people started to get a little bit more nervous again. Right. And what are you seeing now? Because again, like B of A just reported very nice numbers for the first quarter and But there's a lot of caution bleeding into the second quarter from everybody, given the trade uncertainty and so forth. What are you hearing directly from investors about deal flow and what they're seeing? Or is there just an abundance of caution?

3:49

It's an abundance of caution, but no one is willing to go too far out on the limb in either direction, excessively negative or positive. And you can't blame anyone. It feels very, very unstable at the moment. But from my perspective, because I'm always look on the bright side person, I'm pleased with how the insecurity is kind of playing out in the deals that are pausing.

What are the current market sentiments and how is caution affecting deal flow?

4:18

They're not big public proclamations of a pause in deal making. These are we're talking about health care, private equity deals where the lender, the sponsor, sometimes even the seller and the investment banker are wanting to just, hey, let's just wait and see. But nobody is giving up exclusivity. It's not a big dramatic party and we're never going to do this deal.