Current Private Equity Trends in Healthcare with Holly Buckley of McGuireWoods LLP 7-1-25

Summary

Becker Private Equity & Business Podcast: In-Depth Summary

Episode Title: Current Private Equity Trends in Healthcare with Holly Buckley of McGuireWoods LLP
Host: Scott Becker
Guest: Holly Buckley, Chair of the Healthcare Department, McGuireWoods LLP
Release Date: July 1, 2025

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1. Introduction to the Deal Market

In this episode, Scott Becker engages in a compelling discussion with Holly Buckley, a prominent figure in the intersection of healthcare and private equity. The conversation kicks off with an analysis of recent trends in the deal market:

• Deal Volume vs. Number of Deals: Becker references a recent study highlighting that while the total dollar volume of deals has increased in the first half of the year, the number of deals has declined. Specifically, mid-market deals have decreased by approximately 16% year-over-year. This indicates a shift towards larger, more substantial transactions.

Notable Quote:

"We are definitely seeing a squeeze in that space with a decrease in overall deal activity."
— Holly Buckley [00:50]

2. Middle Market Dynamics and Buy-Side Activity

Buckley delves deeper into the dynamics of the middle market, emphasizing the challenges and shifts occurring within:

• Exits and Strategic Sales: There's a noticeable trend of larger sell-side deals, often involving strategic buyers or substantial private equity funds. This contrasts with the reduced activity in mid-market buy-side deals.

• Platform Mergers and Consolidations: Some platforms that have faced challenges are approaching their five-year hold periods, prompting strategic decisions on renewals and potential new transactions.

• Physician Deals Specifics: In provider services, particularly physician deals, there's a pattern where physicians have five-year sales of businesses, non-compete clauses, and employment agreements. As these agreements near their five-year mark, there's increased pressure to renegotiate terms, leading to strategic reassessments.

Notable Quote:

"We're definitely seeing a squeeze in that space with a decrease in overall deal activity... trying to figure out what the right next step is."
— Holly Buckley [00:50]

3. Observing Emerging Trends and Future Expectations

Shifting focus, Becker and Buckley explore the current trends and future expectations within the healthcare private equity landscape:

• Increased Activity in Specific Deal Types: McGuireWoods is witnessing diverse activities, including exits, mid-market buy-side transactions, bolt-on and carve-out deals, and the formation of new healthcare IT platforms.

• Regulatory and Legal Developments: The firm is actively handling matters related to new Texas non-compete laws, evolving state filing requirements nationwide, and tracking new proposed rules that impact the healthcare sector.

• Momentum in the Market: While not reaching the frenetic pace of 2021 or 2022, there's a positive trajectory indicating a gradual gain in deal momentum.

Notable Quote:

"It does feel like we are gaining momentum. It's not of the same level as it was in 2021, 2022, but it does feel like things are headed in a positive direction."
— Holly Buckley [03:47]

4. Legislative Impact and Industry Outlook

The conversation also touches upon the broader legislative environment and its potential impact on the healthcare private equity sector:

• The "One Big Beautiful Bill": Buckley mentions the industry's keen attention to a significant legislative bill, referred to colloquially as "the one big beautiful bill," which is under consideration in the Senate. The outcome of this legislation could have substantial ramifications for the sector.

• Timing and Political Dynamics: There's anticipation surrounding whether lawmakers can finalize and pass the bill before the upcoming holidays. The resultant fallout, whether the bill passes or not, is expected to influence market dynamics and strategic decisions within the industry.

Notable Quote:

"We’re watching them to see if these lawmakers are going to get something done before the holiday or not. A lot of activity in DC will be interesting to see what happens in the fallout."
— Holly Buckley [03:56]

5. Closing Remarks and Final Thoughts

As the episode wraps up, both hosts express optimism and a forward-looking perspective:

• Anticipation of Positive Developments: Buckley remains hopeful about the ongoing activities and legislative outcomes that could bolster the healthcare private equity landscape.

• Personal Note: She also shares a personal note, expressing excitement for the upcoming Fourth of July celebrations, adding a relatable touch to the professional discourse.

Notable Quote:

"Thanks, Scott. And God bless America."
— Holly Buckley [04:37]

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Conclusion

This episode of the Becker Private Equity & Business Podcast provides an insightful analysis of the current state and future prospects of private equity in the healthcare sector. Holly Buckley's expertise offers listeners a nuanced understanding of market trends, deal dynamics, and the influence of legislative developments shaping the industry's trajectory. Whether you're a seasoned investor or new to the field, this discussion equips you with valuable perspectives on navigating the evolving landscape of healthcare private equity.

Transcript

[A]

This is Scott Becker with the Becker Business and the Becker Private Equity Podcast. We're thrilled today to be talking to one of our most listened to guests. We're talking to Holly Buckley who chairs the healthcare department, McGuire Woods. She lives at the intersection of health care and private equity. She'll talk to us about the deal market and what she's seeing. I'll use as a TF point a recent study, an article I saw where deal dollar volume is up for the first half of the year but the total number of deals is down. In that the emphasis is or the concept is that some big, big deals are getting done but mid market deals are still down about 16% year after year. And how we often live and you often live in the mid market. Any sense of what you're seeing so far out there in terms of the deal market and any expectations?

[B]

Yeah, Scott, thank you and thanks as always for the conversation. I think it's exactly right. I think we've seen as you said, we kind of live in the middle market. We've seen some really nice exits that are a bigger sell side deal selling to often strategic but also larger private equity funds. But in terms of the middle market buy side deals, we're definitely seeing a squeeze in that space with a decrease in overall deal activity. We are seeing some platforms looking at combinations that are maybe platforms that have struggled somewhat and are now coming up on a five year hold period. A lot of the time in provider services deals, especially physician deals, there's a phenomenon where the physicians have five years sale of the business non compete, they have five year employment agreements. And there's a pressure when you get toward that five year point for another transaction to kind of re up those covenants, re up positions and reset for a new term. And so we're seeing some platforms kind of getting to that point and trying to figure out what the right next step is. And so we are seeing still deal volume, just you know, not of the same volume as you've said in prior years. And I think we are seeing some volume on kind of add on deals, carve out deals and other smaller deals, but again lower volume than historical.

[A]

Thank you very much. And what are the trends? I think starting to pick up. I mean I know the group has been quite busy. So notwithstanding the fact that there's not a ton of mid market deals going on, the group seems quite busy, at least the group of McGuire Woods. What is your sense? Is there, is there expected to be pickup, is this tax bill expected to have an impact? And any thoughts on what expectations are like for the last half of the year.

[B]

Yeah, yeah, we're busy. I mean we're seeing everything from exits, mid market, buy side, bolt on deals, carve out deals, new formation deals on especially kind of healthcare IT type platforms and then also a fair amount of activity just on kind of other matters that aren't even necessarily real matters. So for example, we're seeing work kick off from the new Texas non compete law, from the state filing laws across the country and the new proposed rules and tracking them. We're seeing as always, a fair amount of work. Health care businesses tend to have a fair amount of needs in general. So I mean we are constantly busy. I think in terms of deal volume, it does feel like we are gaining momentum. It's not of the same level as it was in 2021, 2022, but it does feel like things are headed in a positive direction.

[A]

No 100%. And Holly, anything else that's top of mind right now that you're thinking about or looking at? I know. Anything else you're watching closely?

[B]

You know, I think it's the one other thing that everyone in the industry is watching is the progress on the one big beautiful bill. We're watching that through the Senate wanting to see if these lawmakers are going to get something done before the holiday or not. A lot of activity in DC Will be interesting to see what happens in the fallout, whether things do or don't happen. But that's really it. And then just looking forward to some fireworks and fourth of July celebrations later this week.

[A]

Well, God bless you and thank you so much for joining us again. Howie Buckley, who chairs the healthcare department, McGuire woods, lives at the intersection of healthcare and private equity. Just absolutely brilliant person. Thank you for joining us today.

[B]

Thanks, Scott. And God bless America.