Is private equity going to come to digital health’s rescue?
Don't bank on it, at least not yet...
For years, I’ve seen rampant speculation that when valuations come down (tick) and executives express more interest in selling for the right price (double tick), private equity firms would swoop in to do a bunch of deal-making in digital health.
But they aren’t. Or at least, not at the level that I’d expect.
So I’ve been probing my private equity investor, analyst and banker friends a lot in recent weeks. Given what’s happening in the venture market - you can read my analysis on that slowdown here - many of us have been expecting more deals. Yes, there’s been a trickle, like this one to merge HealthComp, a health plan administrator, with employer-focused wellness company Virgin Pulse for $3 billion. But why isn’t there a full-on flood? If stuff is finally cheap to buy after years of being overly-inflated, why not buy it?
Unsurprisingly, not many people wanted to speak on record about this. But I heard a few things fairly consistently, which have helped me get to the bottom of this ques…