医疗设备服务通讯–2023年第一季度

H1-2023 AUSTINLOSANGELESMINNEAPOLISNASHVILLESEATTLE Cascadia Medical Equipment Services Newsletter:H1 2023 Cascadia Medical Equipment Services Team Recent Medical Equipment Services Tombstones Newsletter Overview Updates from Cascadia & the Medical Equipment Services Team MarqueeTransactions H1 2023 has been a busy time for Cascadia Capital and the Healthcareteam. With 2 deal closings in the sector and 12 firmwide, a busy conferenceschedule, & everchanging market dynamics, there has been little down time. Adam StormoenManaging Director, Healthcare The Medical Equipment Services marketcontinues to experience robustgrowth, as Independent Service Organizations (“ISOs”) demonstrate a clearvalue proposition and refurbished equipment markets continue to grow inpopularity amid budget tightening for healthcare providers at large. “In the ever-evolving landscape of healthcare, theMedical Equipment Services market is thriving. As ISOsunveil an undeniable value proposition and refurbishedequipment markets gain momentum, health providers arebeing rendered a much-needed lifeline to help navigatebudget constraints. Innovation and resourcefulness in theindustry continue to help pave the path towards abrighter, more accessible healthcare future” About Cascadia Amid hiring sevennew senior bankers in the first half of the year,the firmannounced the hiring ofCarle Felton as Managing Director and the formallaunching of a Capital Markets advisory group in Atlanta,further expandingCascadia’s geographic footprint and service expertise. Cascadia Market Insights:H1 2023 State of the Market ISOs Take Spotlight as More Dynamic Service Provider ▪As demand for flexible service providers that offerexpertise across modalitiesand varieties of OriginalEquipment Manufacturer (“OEM”) equipment increases,ISOs are expected to continue togrow in popularityasthey compete on price, efficiency, breadth of offeringsand responsiveness▪An8.9% CAGRis expected for the ISO market over thenext seven years(1) Medical Equipment Services:After an active M&A period from 2021 to 2022, medical equipment services deal flow has slightly slowed in the first half of 2023 in the backdrop of broader M&Auncertainty. Transaction activity is expected to rebound as established platformsexplore inorganic growth opportunities via add-ons, debt markets stabilize, andprivate equity firms looks to deploy capital armed with record amounts of drypowder. Macro Conditions:We understand that market uncertainty can be challenging for founders and Growth of Refurbished Equipment Markets their businesses. As interest rates and equity prices both show upward trends,suggesting divergent forward-looking opinions of the American economy, ourteam of experts is available to discuss concerns and provide introductions to ourvast network of connections. ▪With an increasedfocus onmargin, healthcare providerdemand for refurbishedmedical equipment isgrowing, as technologicaladvancements offermorereliable and efficientrefurbishmentprocesses What We Are Reading: Increasing Complexity of Equipment Capability ▪Hospitalsupply expenses per patient increased nearly 19%from 2019 through 2022, placing greaterstrain on budgets and generating the need fora pivot towards cost reduction(3)▪As medical equipment capabilities increase in complexity with the release of new generation models,skilled service technicians that can minimize equipment downtime are vital for care providers▪OEMs facelabor shortagesthroughout the country(4), makingpartnering with ISOsa viable option toensure service continuity and continue to deliver high quality medical device services Siemens Unveils 2.5-5x Stronger MRI, 3T Magnetom Cima.X2 Market Insights:H1 2023 Flight to Quality in Medical Equipment M&A Activity 2023 shows suppressed M&A activity, but high-quality assets continue to trade at premiummultiples. With increased market uncertainty there has been a decrease in the number of M&Atransactions across the board. However, the medical equipment service industry remains veryattractive to buyers and premium assets continue to trade at record multiples. This has beencatalyzed by healthcare providers relying less on OEMs for equipment servicing and insteadswitching to ISOs that are cost competitive and can service multiple OEM brands. Add-Ons are driving M&A in Recent Quarters Sponsors are adjusting to tighter financing environments by focusing on smaller deals withhigher equity proportions.Across the market, larger deals are being stifled by higherinterestrates and broad uncertainty. Despite challenges, consolidation is taking place as sponsors unlockvaluefor theirplatforms through add-ons. Recently, the focus has shifted to smaller deals withhighly incentivized counterparties to enable quick processes and avoid transaction risk. PE Deal volume Slowdown Despite Large Cash Reserves PE Fund managers with definite fund lives need to deploy nearly $800BN of equity capital,which continues to drive robu