Good question. Glad we asked it. No doubt this is a fluid situation. In fact, given what has transpired in just the past week, our answer today could very well go back to the future in 30 days or so (more on that below). But right now? There is evidence – mostly anecdotal at this point – that the M&A world is beginning to awaken from the Big Sleep.
Last summer, we noticed a peculiarly interesting article about what had become a runaway lending environment. Debt capacity had risen as high as 6-7 times EBITDA. What’s more, EBITDA was fast becoming a proforma, go-forward, if-everything-goes-perfect figure. In other words, a substantially puffed up version of the truth that effectively added another 1-2 turns of EBITDA that lenders were willing to put up.
Remember the run-up to the global recession when lenders were tripping over themselves to get in on a mergers and acquisitions climate that was positively giddy? When debt capacity, typically expressed as a multiple of a company’s earnings before interest, taxes, depreciation, and amortization reached milestone levels, eclipsing the “6X barrier” (as coined by PitchBook)? When the term “covenant-lite”, describing loan agreements with fewer protective covenants for the buyer and less restrictions for borrowers, became a thing?
The saga of WeWork is the stuff of hubris – a financial folly built upon a hope and a dream, financed by a mountain of debt. Once a Google-esque darling of the hyper-hipster Technorati, the office sharing wunderkind saw its valuation tumble from $47 billion to $10 billion to whether it is even viable in the span of a few short months.
All signs are pointing to a strong start in mergers and acquisitions activity for 2020, given the recent acquisition of Patient Care Solutions by AdaptHealth in late 2019. Pat Clifford spoke with HME News regarding what to expect for the remainder of the year.
With its recent acquisition of Patient Care Solutions, AdaptHealth's platform is in a prime position for expanding its supply business. Pat Clifford spoke with HME News regarding the positive effect the acquisition will have for AdaptHealth.
Mergers and acquisitions activity keeps increasing for hospice businesses due to the availability of capital and demographic growth.
Save the date for The Braff Group's Meet and Greet at JP Morgan 2020
Recently, AdaptHealth went public on the NASDAQ. The company just completed a merger with DFB Healthcare Acquisitions Corp and has acquired six companies since July of this year.
Join The Braff Group at BRG's Healthcare Leadership Conference in Washington, D.C. from December 4-6. President Dexter Braff is featured on Thursday's 11:30 AM panel, Will the 2020 Election Impact Healthcare M&A?
