The healthcare market has been hot for a while and companies that garnered little interest 18 months ago are now coming to market to see if there's interest, says Faraaz Karman, a Partner with Twin Brook Capital Partners.
KARMAN: I would say, it's consistent, a solid deal flow but the quality is lacking here and there. Sometimes, you'll get a few deals and they're very high quality, a lot of people are interested and then literally the next week, you'll get a handful of deals in that a very few people are looking at.
I think, there's been a lot of deals who sold recently in the last four or five years. There's been a lot of trading activity in the healthcare sector. At the end of the day, I think, there are deals that people weren't shown before that because the market's hot right now. People are trying to bring the market and seeing if people are -- whether it's lenders or private equity are going to take that. I think, at the end of the day, we sell a commodity which is money, so what really differentiates you is execution, long-term relationship with the private equity sponsor, as well have you done deals in that space. You are knowledgeable about some of the ins and outs of that particular industry, that sub-sector. That's the way you really compete. Long-term relationships and execution, pre-close, and post-close is very important.
A lot of the practice management deals whether it's the dental, optical derm have been very popular. Those are ways to get away from some of the ACA uncertainty that's been out there. You're seeing now same practice management coming around in orthopedic, women's health, the same basic flavor, just a little bit different sub-sector. Those are very popular. A lot of services that are serving in clinical trials right now have also popped up and a lot of healthcare IT. Those seem to be the big areas we're seeing a lot more deal activity. A lot more interest from both lenders and private equity.