Private equity investment in the gastroenterology space has recovered from COVID-19-related delays and is on fire to end 2020. So, what’s in store for 2021?
Here, Bill Bolding, senior analyst at Provident and Eric Major, director at Provident, offered insights on the current state of PE investment in GI and made predictions about what 2021 could look like.
Note: Responses were edited for style and content.
Question: 2020 was disrupted by COVID-19. Now, it seems the firms are making up for lost time. What’s driving the flurry of activity in November and December? Were these delayed deals that were reevaluated?
Bill Bolding, Eric Major: Yes, many of these transactions have been in the works since well before COVID-19 — some even dating back to 2019. GI M&A activity has rebounded due to a couple factors. First off, in the initial Q2 shutdowns, many groups saw patient volumes drop to as low as 25 percent of pre-COVID-19 levels. Nine months later, various regions of the country have re-entered shutdowns, albeit with much more flexibility for outpatient physician groups and their patients. This has allowed groups to sustain patient volumes close to pre-pandemic levels.