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US private equity buyers target healthcare sector

The US healthcare sector saw the most private equity activity in 2004 with firms investing a total of $20.6 billion, according to data from Dealogic.


Steve Elek, head of healthcare practice in the transition services group at PwC said: ?The amount of private equity funding focused on healthcare has increased significantly due to the industry's favourable long-term growth characteristics.?


Examples of private equity firms buying healthcare companies include the Blackstone Group, which has Vanguard Health Systems in its portfolio, and Welsh, Carson, Anderson & Stowe, which owns Ardent Health Services.


?Currently, there is about $100 billion of private equity available, with perhaps 20 to 25% targeting healthcare,? Elek added. ?Private equity buyers often compete on deals, not only with corporate acquirers but with each other.?


The largest US private equity bid of 2004 was Sony's bid to acquire Metro-Goldwyn-Mayer for $4.8 billion in which Sony was backed by Providence Equity Partners, Texas Pacific Group and DJ Merchant Banking Partners.


The Dealogic data also revealed that Citigroup was the top advisor to US equity firms with $24.2 billion in volume from 19 deals.


Top 10 advisors to private equity firms ? 2004


Rank

Advisor

Volume ($m)

N.o








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