Category: Research1

Market Monitor: Online Retail

Read Market Monitor

Market Monitor: Online Retail

Making the right decisions for your business starts with having the most accurate and current information available. Our Online Retail Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry.

Total retail sales in the United States surged to $1,799 billion in Q1 2023, with a 0.9% growth compared to the preceding quarter, and a 3.4% increase over Q1 2022.

Online retail sales in the United States showed extraordinary strength, reaching $273 billion in Q1 2023, a substantial 7.8% rise from Q1 2022, and a compound annual growth rate (“CAGR”) of 19.5% since Q1 2019.

AI presents an opportunity to further penetrate online retail in the next 12 months, improving its ability to deliver appropriate recommendations, and tailored experiences for customers.

Despite falling out of favor in Mergers & Acquisitions (“M&A”) circles at the moment, the overall industry growth quarter over quarter remains strong, demonstrating resilience in the face of inflationary pressures and recessionary forces, which could attract investors to new M&A opportunities later in the year.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: [email protected]

Brandon Clewett, Managing Director: [email protected]

Johnny Sherwood, Director: [email protected]

Banker Insights: Home Health & Hospice

Home health & Hospice

Home care & Hospice transactions

With two massive home health and hospice deals equating to $14 billion in transaction value closing in the first quarter of 2023, we expect deal volume for the remainder of the year to be robust given the interest shown by these large strategics for home health & hospice companies:
- CVS’s acquisition of Signify had an Implied Enterprise Value / TTM EBITDA multiple of 54.2x
- Optum’s acquisition of LHC had an Implied Enterprise Value / TTM EBITDA multiple of 22.4x
- Option Care Health’s announced deal with Amedisys has an Implied Enterprise Value / TTM EBITDA multiple of 10.7x
The pandemic accelerated the preference to age in place and provide alternative care models to vulnerable patients. Aging populations and the shift to lower cost settings continues to provide a growing market opportunity. All these factors serve as the backdrop to keep strategic and investor interest high. Further, an ever-changing regulatory environment, tight labor market, and high interest rates will lead some operators to seek suitors creating a healthy push-pull dynamic.
We also expect the numerous private equity-backed entities to continue the trend of smaller, add-on acquisitions as they seek to maximize return on their platform investment while waiting for interest rates to come back down and time their monetization event accordingly.
Home health and hospice is continued to be viewed as an essential means to further coordinate care in a value-based shift, and accomplish the broader three objectives of healthcare, mainly: improve outcomes, lower costs, and improve patient experience. As such, we believe the highly fragmented and growing sector will continue to consolidate and witness strong transaction activity.

For more information or questions, please contact our Healthcare Services team:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Daren Oddenino, Director: doddenino@hexagoncapitalalliance.com

home care hospice care

Banker Insights: Healthcare Staffing

Healthcare staffing

Healthcare transactions

Historically, outsourced staffing services have been used to fill a temporary or small gap in a healthcare provider organization’s clinical needs. With the onset of the pandemic and associated provider burn-out, along with aging clinicians retiring, these healthcare delivery groups are seeing staffing agencies as a more sustained solution as clinical staffing shortages persist.
In our conversations with providers and investors, healthcare staffing represents a strong and growing market, which is driving increased interest and valuations, and is leading to more consolidation within the highly fragmented sector. Further contributing to the activity, many owners are seeking an exit at this time as they see a ripe opportunity to monetize the asset they built or seek an investor to help them achieve the next level of success.
This is illustrated by the active M&A market within healthcare staffing. From 2021 through YTD 2023, nearly 100 transactions completed with strategics and private equity being equally active in seeking targets and completing transactions.
Additionally, with pricing (increased billing rates) and volume figures increasing for staffing agencies, it is providing exceptional market dynamics for owners to receive premium valuations, should they choose to pursue a strategic or financial partner.
With staffing shortages appearing to be the new normal for all healthcare delivery organizations, we expect strategic and financial investor demand for healthcare staffing organizations to remain high through 2023 and beyond.

For more information or questions, please contact our Healthcare Services team:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Daren Oddenino, Director: doddenino@hexagoncapitalalliance.com

healthcare staffing

Market Monitor: Personal Care

Read Market Monitor

Market Monitor: Personal Care

Making the right decisions for your business starts with having the most accurate and current information available. Our Personal Care Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry.

Due to inflationary pressure, rising interest rates, and general economic uncertainty, the transaction volume in the Personal Care sector decreased in 2022 and into 2023, as many buyers and investors are taking a “wait and see” approach.
Differentiated companies with unique product categories, distribution channels, and value propositions are attractive targets, despite strategic acquirers and financial investors being more selective in their pursuits. Examples include Procter & Gamble’s acquisition of Mielle Organics and Stride Consumer’s growth equity investment in Patrick Ta Beauty.
Private Equity groups are interested in contract manufacturers of Personal Care products because of their stable cash flows, scalability, and ability to mitigate brand risk. Examples include Knox Lane’s investment in Elevation Labs and Cornell Capital’s ongoing rollup via its Innovations in Nutrition and Wellness (INW) platform.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Brandon Clewett, Managing Director: bclewett@hexagoncapitalalliance.com

Johnny Sherwood, Director: jsherwood@hexagoncapitalalliance.com

personal care industry

Banker Insights: Material Handling

material handling

case study- transactions

The global automated material handling equipment market size was valued at $35.8 billion in 2019 and is projected to reach $56.5 billion by 2027 (Fortune Business Insights).

The key drivers of rising demand for automation include global and supply chain disruptions, increasing customer demands on delivery dates, rising omni-channel fulfillment requirements, increased focus on warehouse safety, and scarce and increasing costly labor resources.

A variety of warehouse robotics are now available (AMR, ASRS, AGV, etc.) and although different in specific capabilities, as a whole, robotics are transitioning warehouses to faster, safer, more precise facilities across a variety of industries.

From a strategic planning and Mergers and Acquisitions (M&A) perspective, the automated material industry is still extremely fragmented and positioned for growth through consolidation at attractive multiples (especially for those with differentiated solutions).

For more information or questions, please contact the team:

Brandon Clewett, Managing Director: [email protected]

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Banker Insights: Healthcare IT

Healthcare IT

Healthcare IT transactions

The Healthcare industry is shifting to a value-based care model, which aims to deliver more effective care at a lower cost. We expect that providers will continue to pursue acquisitions of healthcare IT (HCIT) targets to decrease costs while maintaining a high standard of care.
A shortage of labor and rapidly rising wages remain as the main pain points for providers. Private equity has identified this dynamic, and invested in provider IT solutions that optimize operations and improve margins.
Revenue cycle management (RCM) and ancillary companies that improve collection rates and lower the costs of complex reimbursement collections, remain highly desirable acquisition candidates by both strategic and financial buyers.
Outside of provider-focused HCIT, bio-pharma IT solutions that aim to improve workflow productivity, project management and reduction in clinical trial times, continue to remain a bright spot for deal activity.

For more information or questions, please contact our Healthcare Services team:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Daren Oddenino, Director: doddenino@hexagoncapitalalliance.com

Banker Insights: Physician Services

PHYSICIAN services

physician services transactions

Investor interest in physician practice management remains elevated and 2023 represents an excellent time for physician organizations to consider adding a strategic partner.
While the Covid-19 pandemic is over and physician organizations are returning or exceeding pre-covid volumes, operating challenges created by the pandemic, such as staffing, and enhanced patient acuity remain. These persistent operating conditions, coupled with sustained investor interest, are providing physician organizations with the opportunity to strengthen their organization by adding a strategic partner at attractive valuations.
These partnerships provide an opportunity to affiliate with a larger entity or remain independent while improving its financial strength, enhancing revenue, and adding greater efficiencies. It can also help accelerate an organization’s ability to transition to greater value-based revenue from fee-for-service.
Furthermore, these transactions provide an opportunity for physician owners to monetize a portion of the equity they have built over the years of serving as a physician and will typically be treated as capital gains vs. personal income.
Physician organizations that are interested in strengthening their position in today’s dynamic healthcare environment should consider all the advantages a strategic partner can bring.

For more information or questions, please contact the Healthcare Services team:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Daren Oddenino, Director: [email protected]

healthcare physician services

Market Monitor: Healthcare

Read Market Monitor

Market Monitor: Healthcare

Making the right decisions for your business starts with having the most accurate and current information available. Our Healthcare Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry.

Total U.S. healthcare services mergers & acquisitions (“M&A”) volume through Q1 2023 reached 184 transactions.
Investors in healthcare services plan to increase M&A activity through 2023, despite concerns of a recession.
Healthcare multiples support the industry’s resilience relative to the broad market, representing a median of 10.8x EV/EBITDA.

For more information or questions, please contact our contributors:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Banker Insights: Behavioral Health

Behavioral Health

behavioral health transactions

Continuing the strong trends from last year, 2023 is shaping up to be another solid year for M&A in the behavioral healthcare sector.
Both residential and non-residential behavioral health services continue to garner a great deal of interest from strategic and private equity buyers, leading to competitive processes and attractive valuations.
We expect these transaction dynamics to continue, as financial buyers look to deploy capital for platform acquisitions as well as supplementing organic growth through add-on acquisitions. Similarly, large strategic providers are fueling earnings growth through the acquisition of complementary services, extending the continuum of care as well as geographic expansion.
Clinicians and practice owners who are interested in taking their practice to the next level through a liquidity event should consider taking advantage of the attractive transaction environment we currently find ourselves in.

For more information or questions, please contact the Healthcare Services team:

Paul Kacik, Managing Director: [email protected].com

Brad Erhart, Director: berhart@hexagoncapitalalliance.com

Market Monitor: Transportation & Logistics

Read Market Monitor

Market Monitor: Transportation & Logistics

Making the right decisions for your business starts with having the most accurate and current information available. Our Transportation & Logistics Market Monitor keeps you up to date on the events, trends, and market forces that shape and guide the industry.

Port activity showed resilience throughout the year but experienced a significant drop in the fourth quarter of 2022 and the first quarter of 2023, especially on the West Coast.
Diesel costs have retreated from pandemic highs but are still elevated from pre-pandemic levels.
Long Haul trucking has been trending downward, due to the shift towards regionalized imports, which is driving the need for more cost-effective and sustainable supply chain solutions.
As global supply chains experience realignment due to geopolitical risk, we expect consolidation of the sector to accelerate to capture growth in new geographies and cost savings in new technologies.

For more information or questions, please contact our contributors:

Rich Anderson, Managing Director: randerson@hexagoncapitalalliance.com

Brandon Clewett, Managing Director: bclewett@hexagoncapitalalliance.com