According to a new report from an advocacy group that monitors the health-care sector, private equity-owned businesses were responsible for a significant number of bankruptcies last year, with more distress on the horizon. The report, set to be released Wednesday, found that PE-backed firms accounted for about a fifth of the 80 health-care company bankruptcies in 2023. This constituted at least 17 bankruptcies, making it a “record year” for large health-care bankruptcies.
In addition to private equity-owned businesses, venture-capital backed companies also contributed to the number of bankruptcies in the health-care sector. The report indicated that these companies made up 15% of the filings, with another 12 companies declaring bankruptcy. The study specifically focused on companies with liabilities exceeding $10 million.
With the prevalence of bankruptcies among private equity and venture-capital owned businesses in the health-care sector, it is clear that financial distress is a pressing issue within the industry. As the report suggests, there is a looming wave of distress that may continue to impact companies in the health-care sector moving forward.