July 23, 2018

Home Healthcare Services provide an enticing opportunity during healthcare boom

George Fairbanks, Merrill Corporation | July 23, 2018

The healthcare sector is currently one of the busiest in the IPO market because a robust 84 percent of Fortune 50 companies are currently involved in healthcare. That means there is plenty of ripe opportunity for savvy dealmakers and investors. Our recent webinar, Merrill Insight™ Video: Healthcare Spotlight, Merrill corporation talked to a global panel of experts and polled the audience of 500+ dealmaking professionals on key topics.

More than 70% of the webinar audience is very confident in the M&A market during the next 12 months. This is likely borne out by the significant increase in deals occurring in the US health services market during 2017, representing an increase in deal value of 146% over 2016, as measured by PwC Health Research Institute in April of this year.

Merrill’s survey indicates that many see significant opportunity in the Home Health Care segment, with nearly 43% of responses pointing toward Home Health Care as neglected by the healthcare boom. Several of the session panelists validated this data, noting the aging population, the desire for seniors to stay in their homes and the significant cost savings that can be reaped by effective in-home care and medical treatment over hospitalization.

During the webinar, Taylor Phelps, Managing Director, Healthcare Raymond James, pointed to many factors that should make home healthcare attractive to investors. Phelps noted every dollar spent on home health is keeping a patient out of a nursing home or hospital. He added that future home healthcare will likely include therapy, house call visits from medical professionals and non-medical services.

“I think these aging boomers are going to want to stay in their home. I don't think they're going to want to go to the nursing home,” Phelps said. “And, because of that, with the evaluations the way they are almost everywhere else in healthcare, I think there's still some pretty good areas that you could invest in within home health, and actually do quite well.”

A final topic centered on the long-term impact on innovation and research and development in pharmaceuticals as the US administration moves to lower drug prices. Nearly three-quarters of respondents are concerned about funding for research and development as pharmaceutical companies begin to have less funding for research activity.

Don’t miss the Merrill Insights™ Video: Healthcare Spotlight webinar.

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