Panelists Charles J. Ditkoff, managing director of the global healthcare group at Bank of America Securities Group LLC, and Ezra Perlman, partner at Francisco Partners LP, joined moderator George Hill, vice president of investment banking at Leerink Swann, to discuss dealmaking in the healthcare technology sector. Ditkoff said the customer base within the sector is so diverse it's difficult to consolidate. Perlman concurred, also pointing out, specifically, to the "personality- driven CEOs" who own smaller tech niche companies that don't necessarily want to sell.
The heathcare technology sector seems somewhat fragmented between big players such as General Electric Co. or McKesson Corp. and smaller "mom and pops" shops. It also doesn't help dealmaking when companies create niche healthcare software that is suited for just one hospital not necessarily for a whole system, which makes selling the company very difficult.
As far as going public for these healthcare technology companies, the two panelists said there is a great appetite for healthcare technology companies from investors.
But the reality is, according to Ditkoff, that there's "a big disconnect between the industry and the whole macro level. Some companies have great products ... but if they try to do more [than they're capable of] they'll stumble." And that doesn't translate well for public companies. - Gerald Magpily
