Healthcare Services Sector Update – July 2020 M&A Advisory

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Healthcare Services Sector Update – July 2020

The S&P Healthcare Services Index increased by 10.8% over the last month, compared to the S&P 500 Index, which increased 5.0% over the same period.

Over the past month, the sectors that experienced the most growth were acute care hospitals (up 29.6%), HCIT (up 20.7%) and healthcare staffing (up 20.1%). The sectors that experienced the largest declines were consumer directed health/wellness (down 3.9%), care management/TPA (down 1.6%) and assisted/independent living (down 1.4%).

The current average Last Twelve Months (LTM) revenue and LTM EBITDA multiples for the healthcare services industry overall are 1.84x and 10.2x, respectively.

Healthcare Services Sector Update – July 2020

The sectors with the highest valuation multiples include:

  • HCIT (5.55x LTM revenue, 22.2x LTM EBITDA)
  • Hospital vendors (1.98x LTM revenue, 22.2x LTM EBITDA)
  • Home health/hospice (2.79x LTM revenue, 19.1x LTM EBITDA)
  • Contract research organizations (3.30x LTM revenue, 20.0x LTM EBITDA)
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