Introduction

We are pleased to share with you a summary update of market valuations and activities in the Asia Pacific healthcare industry (equipment and services) for the second half of 2019.

Healthcare is one the key sectors in which Armor specializes in and closely follows market trends. Please contact us for further discussions.

Valuations of Asia Pacific’s public companies have increased over H2-2019 compared to the same period in 2018. Median EBIT was 31.2x by the end of Q4-2019 vs. 25.1x in Q4-2018 – an increase of nearly 24% year-on-year.

Based on 400-500 selected companies, the table above illustrates that industry returns and have been stable for the past 4 years, with a slight dip in the latest statistics. Meanwhile, industry margins have shown improvements in 2019 and the latest statistics (especially in gross margin and EBITDA).

M&A activity by volume has been relatively consistent over the last 6 quarters with 59-74 transactions (majority stake only) per quarter. The second half of 2019 was characterised by a few mega-deals (e.g. Hitachi’s diagnostic imaging related business) pushing up the total transaction value for the year.

Armor selected the largest M&A transactions across the region in H2-2019 for which information on Implied Enterprise Value and selected multiples were available. The data shows a wide range of multiples for acquisitions.