The Corner Series Hospital M&A and Private Equity with Rex Burgdorfer
The healthcare system is one of the most fragmented industries in the United States. But as strategic players begin consolidating through mergers and acquisitions, private equity investors are seeing growth opportunities in the industry.
On this episode of The Banker's Corner, McGuireWoods' Geoff Cockrell invites Rex Burgdorfer, Partner at Juniper Advisory, to discuss M&A trends, consolidation, and activity in the healthcare sector.
The hospital industry presents challenges for private equity in terms of regulation. This limits investors’ ability to exert control and influence over management compared to other sectors. A successful model that has emerged is the partnership between private equity firms and high-quality academic medical centers.
But how is this changing business model impacting investors’ interest? According to Rex, fewer well-capitalized investor-owned companies are available today. What he has seen is nonprofits holding an advantage in making acquisitions due to tax exemptions, participation in programs like 340B drug pricing, and lower cost of capital from the tax-exempt bond market.
This trend may change in the near future as nonprofits struggle with access to capital and rising interest rates.
Geoff and Rex also discuss trends for private equity and health systems, regulatory scrutiny in the industry, creative competitors, and how a looming recession could affect the industry.
Featured Guest
Name: Rex Burgdorfer
What he does: Rex has over two decades of investment banking and strategic financial advisory services experience. He has advised all forms of nonprofit hospital systems on M&A transactions, including academic, community 501(c)3, faith-based, and local government entities. Rex was previously with Morgan Stanley and holds an MBA from the Kellogg School of Management at Northwestern University.
Organization: Juniper Advisory
Connect: LinkedIn
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