Healthcare Services Sector Update – July 2018

The S&P Healthcare Services Index increased 3.4% over the last month, in line with the S&P 500, which increased 3.6% over the same period. Over the past month, the best performing sector was Acute Care Hospitals (up 18.7%), driven primarily by LifePoint, which announced a deal to be acquired by Apollo Global Management at a 36% premium to market.* Other top performing sectors included Contract Research Orgs (up 15.2%) and Rehabilitation (up 12.0%). The poorest performing sectors were Behavioral Health (down 9.5%), Consumer Directed Health/Wellness (down 2.3%) and Dialysis Services (down 1.8%). The current average LTM revenue and LTM EBITDA multiples for the Healthcare Services industry overall are 2.32x and 14.7x, respectively.

The sectors with the highest valuation multiples include:

  • Consumer Directed Health/Wellness (5.13x LTM Revenue, 28.3x LTM EBITDA)
  • HCIT (4.66x LTM Revenue, 26.4x LTM EBITDA)
  • Contract Research Orgs (3.57x LTM Revenue, 19.1x LTM EBITDA)
  • Hospital Vendors (1.82x LTM Revenue, 19.0x LTM EBITDA)
  • Read the report for more detail on sector activity.

 *Source: Prang, Allison “LifePoint Health Agrees to Apollo Buyout.” The Wall Street Journal July 23, 2018 Web.


 

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