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Meeting consumer demands
The healthcare industry remains a very hot place for investment. According to Morgan Stanley, the U.S. healthcare M&A market began 2018 with almost $39 billion worth of deals announced in January — the strongest start in over a decade. Many of the companies that are garnering attention from strategic acquirers and private equity firms have a few things in common: they are in subsectors where there is room for consolidation; they take pressure off hospitals; and most aim to give patients more specialized treatment, which is believed to lower the cost of care and improve outcomes.

“As consumers, we are all used to having access to almost any product or service on our phone in minutes,” says Justin Ishbia, founder of Shore Capital Partners. “As healthcare becomes more retail-focused, we believe that the winners in healthcare are those who adapt to the demands of consumers, and those who rely solely on traditional models will be left behind. The traditional models are no longer working, and there is room to deliver high-quality care at a lower cost and build better retail-like models that treat patients like valued customers, while also reducing costs by taking advantage of economies of scale. This is happening in a variety of niches within healthcare.” 

Here are six subsectors that are garnering interest from both private equity firms and strategic acquirers.


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