Private equity firms are lining up to target Australian public healthcare companies. As one investor put it to us, everyone listed is being looked at, no question about it: “Every healthcare banker is running around with exactly the same page with the same 10 opportunities on there. People are just developing a thesis around why they would be better in a private market.”

For the flurry of activity, it’s not like there are countless names to mark. Much like infrastructure, listed healthcare has been shrinking over the past few years and with the IPO market effectively closed, it’s not being replenished.

Working backwards, Pacific Equity Partners bid for Healthia last week, Estia fell to Bain Capital, x2 Healius units – day hospitals to QIC and Adora Fertility to Liverpool Partners and Virtus Health to BGH.

So, what’s driving this flurry of interest? First, PE loves defensive businesses when consumer sentiment tanks. If you need a brain scan, you get it done, there’s no discretionary element. Longer term, they’ve got their eye on an ageing population and Australians living longer, both of which point to continued demand in the sector for decades to come.

Second, PE is willing to look beyond this reporting season’s disappointing set of results to hopes of a better operating environment, when inflation isn’t running so hot and costs normalise. Finally, PE can more freely load a company up with debt to pursue acquisitions away from the public eye.

When it comes to making a play, it’s much the same consideration as pursuing any other listed player – determining how realistic it is to get a done deal, whether the shareholders/board will support going private, if you can raise enough debt and making sure you won’t get egg on your face.

Happy reading,

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• Jobs go after restructure at Blackbird Ventures-backed fintech Carted.
• Orora’s $1.35 billion raise gets institutional support despite the big discount.

• Bankers say ‘cookie-cutter’ M&A is dead, private equity to the rescue, writes Aaron Weinman.
• Will Vicars’ hedge fund Caledonia still believes in loss-making US property stock Zillow, writes Primrose Riordan.

Winson Group is expected to grow revenue to $208 million in 2024, implying a 9 per cent compound annual growth rate.

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