More Big Deals for Health Care Eyed in 2022
Morris F. DeFeo, chair of Herrick's Corporate Department, was quoted in Real Money in an article discussing the recent boom of M&A investments in the healthcare technology sector. The article described how big tech companies have acquired or partnered with healthcare tech companies and predicted that more mergers will follow and that "2022 could be another landmark year for health care industry mergers."
Morris reflected, "Covid-19 came along and slammed the breaks [sic] on M&A in early 2020, but in the recovery that action has really roared back," adding, "Now you have the confluence of a very dynamic, technology-focused market with a new and nearly religious fervor around healthcare. Many would argue the focus on health care is overdue as Covid has really spotlighted a number of deficiencies in U.S. health care."
The article stated that Morris "said he sees an almost inevitable increase in tech crossovers to the health care space as the latter space demands more technological advancement. He added that the flow of dollars to special purpose acquisition companies, or SPACs, and health care-focused private equity funds are only going to accelerate this spending."
Morris explained, "There is an enormous amount of money out there, some of which has a finite window in the case of SPACs and private equity funds. The fuse has been lit and they need to make investments, so they are very anxious to get into the market[.]" He concluded, "That is inevitably driving an increase in demand for these deals and a sort of arms race for the best deals."
The article went on to describe how the pandemic has driven the health care tech sector and M&A investments, including in the areas of home health, tele-health and medical devices and diagnostics.
Read the full article in Real Money here. Access may require a subscription.