“The Corner Series” is a multiperspective podcast series by McGuireWoods featuring commentaries from lawyers, bankers and a number of specialists about the developments and issues dominating today’s middle-market private equity. Tune in with McGuireWoods partner, Geoff Cockrell as he and specialists share real-world insight to help enhance your knowledge.
Episode 40: November 20, 2023
As the fee-for-service model in U.S. healthcare grows increasingly unpopular, shifting to a value-based care paradigm can move the healthcare system toward better outcomes, lower costs, better patient access and experiences — and greater investment opportunities.
In this episode of The Corner Series, McGuireWoods’ Geoff Cockrell is joined by Andrew Clark, managing partner at Leavitt Equity Partners, to discuss investment opportunities in value-based care. Tune in to hear Geoff and Andrew explore the evolution of value-based care and how it will continue to shape the healthcare industry. They discuss the different sectors that lend themselves to value-based care investment, including primary care, chronic care, episodic care and women’s care.
They also address the disruptive potential of non-healthcare participants, payer and provider convergence, and the role of artificial intelligence in driving efficiency and improving patient care.
Episode 39: November 13, 2023
After an active 2022, this year has seen a shift in the professional practice model space, with new challenges around the cost of capital, pricing and labor. Some who raised a lot of capital in 2022 will still be looking for deals, while others will focus on valuation and financial performance.
On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell sits down with Robert Aprill, managing director at Physician Growth Partners, to discuss how the market might evolve in 2023 and beyond.
The aftermath of COVID-19 led many business owners to reevaluate the importance of size and scale in their operations, leaving them more open to partnering with larger entities. In private equity, an adviser’s role is to educate clients about compensation and alignment options when considering partnerships with healthcare platforms. The focus is on ensuring that physicians are partners and are compensated based on performance, promoting alignment through incentives rather than punitive measures like production thresholds.
“We spend a lot of time with our clients. I think oftentimes with us, we’re presenting something versus having buyers present something to us,” explains Robert.
The episode also covers areas of consolidation, interest in niche specialties, and aligning equity with compensation.
Episode 38: November 7, 2023
On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell invites Alessio Baraldi, managing director at Albaron Partners, to discuss value creation in healthcare provider services. Alessio provides insight into the equity structures that work best for his portfolios and how he approaches compensation to keep everyone aligned.
“In an environment where there is quite a bit of wage inflation, having a unified system where the management team is able to manage expenses at the center level without relying on the doctors making those calls, has been quite helpful,” Alessio says.
Value creation from a growth strategy can be quite effective, and firms use various approaches such as de novo or acquisitions. Alessio and Albaron Partners prefer a mixture of both to add the most value to their partners. Integrations and centralization also provide value to a portfolio company. Being well-integrated and centralizing support functions like billing and call centers can help a company adapt to wage inflation while increasing operational efficiency.
Episode 37: November 1, 2023
The difficulties faced by healthcare provider consolidations could be temporary or they could indicate a long-term decline in the attractiveness of consolidation. Some challenges, like high debt and labor market imbalances, are temporary and don’t reflect the fundamental quality of the businesses involved.
On this episode of The Corner Series, McGuireWoods’ Geoff Cockrell is joined by Mark Francis, managing director and global head of healthcare investment banking at Houlihan Lokey. The two discuss the future of healthcare provider consolidations through the lens of those working in the industry right now.
Mark and Geoff talk about the future of healthcare provider consolidations through the lens of those working in the industry. Over the past six to eight months, some larger platforms that were acquiring smaller companies paused their acquisition activities due to a disconnect between seller expectations and current valuations. They also were waiting for more favorable credit conditions and pricing adjustments. Now, these platforms are beginning to look to the market again to see what is available.
Mark and Geoff also discuss the healthcare sector’s resilience during economic slowdowns. Healthcare often is less volatile than other sectors, making it an attractive option for investors looking to allocate funds during economic uncertainties. Healthcare is a mature market, but new interest in private equity has led to a reshuffling of focus within sectors. Some sectors such as healthcare technology, veterinary care and behavioral health remain highly attractive despite varying trends in their valuations.
In addition, Mark and Geoff address valuations and the importance of running and operating integrated businesses. “Great companies get great valuations, and we can debate what great is, but if people don’t feel good about the valuations, largely they’re not trading,” Mark says.
Episode 36: The Professor’s Corner, October 23, 2023
On this episode of The Professor’s Corner, Diwakar Sinha of Polaris Healthcare Partners joins McGuireWoods’ Geoff Cockrell to discuss how practices can prepare to sell, what specialties are most attractive and how the search for investors varies from practice to practice.
According to Diwakar, the same volume of deals is occurring, but the number of A-grade deals may be fewer. Currently, most A-grade deals exist in certain specialties. Diwakar also predicts that the cost of capital will come down mid-2024, which is a good reason to start planning from the sell-side now.
Episode 35: The Banker’s Corner, October 16, 2023
Craig, who leads the company’s sell-side M&A in primary care and behavioral health, shares his insights on investors working with fee-for-service healthcare groups. Some investors may find it too risky and prefer to wait for the transition to value-based care before investing, he notes. Others see an opportunity to enter at a lower price and facilitate the conversion to value-based care.
For the remainder of 2023 and into 2024, investors can be confident that there will always be interest in this sector and capital is available to be deployed.
Episode 34: The Capital Corner, October 5, 2023
On this episode of The Capital Corner, McGuireWoods’ Geoff Cockrell sits down with Hector Torres and Rich Blann, managing directors on DC Advisory‘s global healthcare team. They discuss market trends and current areas of interest from both investors’ and sellers’ perspectives.
Hector and Rich share the challenges they’ve seen in the market this year, as well as where they see the upward trends heading. From the bid-ask spread to physician practice consolidations, they offer plenty of advice and hope for the remainder of the year.
Episode 33: The Banker’s Corner, August 7, 2023
The healthcare system is one of the most fragmented industries in the United States. As strategic players begin consolidating through mergers and acquisitions, however, private equity investors are seeing growth opportunities in the sector.
Geoff and Rex also discuss trends for private equity and health systems, regulatory scrutiny in this area, creative competitors, and the impact a looming recession could have on the industry.
Episode 32: The Capital Corner, July 26, 2023
Closing a deal requires give and take, and in times of uncertainty, the right sponsors will have your back.
On this episode of The Capital Corner, Andy Silverman, managing director at Parkway Capital, joins McGuireWoods’ Geoff Cockrell to discuss the trends, deal structures and challenges an SBIC may see in the market now.
Andy and Geoff explore topics related to investment and underwriting, including the significance of independent sponsors in Parkway Capital’s deal flow. Andy notes that being a long-tenured capital partner of independent sponsors allows his firm to make informed decisions on which deals to pursue, with eight of its nine portfolio company deals led by independent sponsors.
Episode 31: The Banker’s Corner, July 19, 2023
The healthcare sector attracts interest from the investment community because it’s seen as more resilient than other parts of the economy. But how does the medspa sector compare? During the pandemic, cosmetic procedures actually rebounded faster than the medical dermatology side.
On this episode of The Banker’s Corner, McGuireWoods’ Geoff Cockrell discusses all things medspa with Mike Pisani, managing director and co-head of healthcare services at Houlihan Lokey. They cover trends, growth opportunities and challenges for today’s medspas and how they affect investors’ view of the space.
Episode 30: The Banker’s Corner, July 7, 2023
Proceed with caution — and a little creativity.
Together, Bob and Geoff delve into a topic overshadowing private equity for the past few months: tightening credit. Given his position at Kroll and experience in a broad array of corporate finance advisory engagements, Bob provides an apt commentary on the current climate, including the impact on healthcare business.
Tune in to hear about the outlook for the rest of 2023 and the creative ways professionals are managing workarounds and earnouts in this strange market climate.
Episode 29: The Professors’ Corner, June 27, 2023
In most professions, pay-for-performance is the norm. A certain level of performance is expected for an individual to get paid. So why has the fee-for-service model in healthcare persisted for so long? And what’s causing the shift toward value-based care?
On this episode of The Professor’s Corner, Larry Elisco, partner at Wipfli LLP, discusses trends in value-based medicine with McGuireWoods’ Geoff Cockrell. The two acknowledge that the compensation structure has had a slow start despite its promising future.
“My view is that value-based care changes the landscape. It’s pay-for-performance. It creates risk at the provider level, where providers are in fact either going to be paid for performing well or not being paid if they don’t perform well. And that’s really what I see as a mega trend,” says Larry.
Episode 28: The Capital Corner, June 8, 2023
Did you know that pharma services is one of the most active areas of healthcare investing? On this episode of The Capital Corner, McGuireWoods’ Geoff Cockrell sits down with Daniel Brinkenhoff, managing director at Centre Partners, to discuss the segmenting of the pharma services sector and some of the headwinds and tailwinds investors are seeing.
Episode 27: The Capital Corner, May 23, 2023
On this episode of The Capital Corner, McGuireWoods’ Geoff Cockrell sits down with Dan Hosler, managing partner and founder of DuneGlass Capital, to discuss trends for healthcare services companies interested in using the private equity playbook to surcharge their growth.
Episode 26: The Banker’s Corner, May 3, 2023
On this episode of The Banker’s Corner, Provident Healthcare Partners Senior Managing Director Rebecca Leiba and Managing Director Eric Major sit down with McGuireWoods’ Geoff Cockrell to discuss investing in cardiology, a sector that has seen a sizable uptick in activity over the past two years.
Episode 25: The Professor’s Corner, April 17, 2023
In this era of private equity involvement with healthcare, companies and individuals can no longer avoid liability by claiming they are just investors in a business. Investors’ liability is now in the spotlight. Professionals in the industry predict that the government will increase the frequency of commercial audits and audits by the Centers for Medicare & Medicaid Services.
On this episode of The Professor’s Corner, host Geoff Cockrell is joined by Wiks Moffat for a discussion of the importance of compliance programs. Bringing over 25 years of professional experience to this discussion, Wiks is a co-founder and principal at HealthCare Compliance Network, where he assesses, builds, implements and maintains compliance programs.
Episode 24: The Banker’s Corner, April 6, 2023
On this episode of The Banker’s Corner, Kyle Brown, managing director at Brown Gibbons Lang & Company, joins McGuireWoods’ Geoff Cockrell to discuss the latest developments in healthcare private equity investing. With the current deal market offering lower valuations, companies are looking at internal improvements, such as operations and platform infrastructure, as well as mergers and organic growth strategies.
Kyle discusses how diversification, platform infrastructure and a true dual-pronged growth strategy are key drivers of value regardless of the subsector. “Sure, buy and build all day. You have that integration strategy in spades, great,” Kyle says. “But I’ve seen — and not because of the debt financing markets, but really since COVID — folks are putting a premium on de novo growth strategies.”
Kyle and Geoff also discuss two subsectors they predict will experience increased investor activity in 2023: orthopedics and pain management. Both sectors have unique traits that add value to investors and make them ideal for investment activity.
Episode 23: The Banker’s Corner, March 30, 2023
An uncertain market and disagreements on valuations have created an interesting start to 2023, which saw a decrease in transactions in the first quarter. For those looking to make larger healthcare sales, the general consensus seems to be to wait until Q2 or Q3 and see if market conditions improve. Raj recognizes that buyers are being more thoughtful and cautious when considering a deal. However, the lower and middle market valuations are holding up.
Episode 22: The Banker’s Corner, March 20, 2023
With higher interest rates causing anxiety throughout much of the first quarter of 2023, McGuireWoods’ Geoff Cockrell invites David Baker, managing director at FTI Consulting Group, to share his view of the market and how it is impacting sellers in the M&A space.
Healthcare as an industry is more resilient in a down economy, David explains, as demand is less likely to be impacted by economic factors. This resilience attracts investors looking to avoid the challenges present in other sectors. “I think what attracts a lot of investors to the segment is how steady it is,” says David. “Healthcare hasn’t had the highs and lows that many other sectors have gotten over the years.”
Episode 21: The Banker’s Corner, March 14, 2023
On this episode of The Banker’s Corner, McGuireWoods’ Geoff Cockrell chats with Larry Barr, partner at Middle Branch Partners, about the buy side of private equity transactions, particularly in the healthcare industry. Larry also shares his take on some of the drivers bringing private equity investment into the medtech space.
Despite uncertain waters due to macroeconomic dynamics and uncertainty around credit availability, Larry remains bullish on medtech. “I’m one of those that’s a perennial bull,” Larry explains. “As I like to say, I couldn’t do what I do for a living if I wasn’t an optimist.” He cites a recent medtech deal, coming in at just under $200 million, as proof that there are good transactions in the market and people are going to find a way to close them.
Episode 20: The Professor’s Corner, March 1, 2023
In January 2023, the Federal Trade Commission released a proposed rule that is making waves in the business and legal communities. The proposed rule would make it illegal for employers to enter into noncompete agreements with workers in most circumstances and would require employers to rescind existing noncompete provisions.
McGuireWoods antitrust partner Holden Brooks sits down with Geoff Cockrell to explore the potential ramifications of a noncompete ban, potential legal challenges to the rule and the scope of the FTC’s rulemaking authority, what to watch in the ongoing debate surrounding the scope of the rule, and what alternatives to consider to protect your business interests if the rule goes into effect.
Episode 19: The Capital Corner, January 26, 2023
Only 20% to 25% of patients who need behavioral health support actually receive care. That means the behavioral health sector offers opportunity and high return on investment for investors focused on delivering better outcomes at lower costs.
Terry Wang, partner at Regal Healthcare Capital Partners, joins host Geoff Cockrell on this episode of The Capital Corner for a discussion of opportunities in the behavioral health sector, growth strategies and what 2023 may look like.
Episode 18: The Banker’s Corner, December 20, 2022
The physician practice management (PPM) and the consumer healthcare sector are often referred to interchangeably, but they have very different needs and concerns on the market. In consumer healthcare, patients have a lot of discretion in their choice of physician. PPM, by contrast, is more referral-driven. But these distinctions are softening.
On this episode of The Banker’s Corner, host Geoff Cockrell welcomes Geoff Smith, managing director and co-head Harris Williams’ Healthcare & Life Sciences Group and Charles Busch, vice president of the company’s Healthcare & Life Sciences Group. Together, they discuss the appeal of PPM to investors, reimbursement stability and trends they expect to see in the future
Episode 17: The Professor’s Corner, November 21, 2022
In this second episode of a two-part series, McGuireWoods partner Mark Freedlander returns to discuss the ways a sponsor company can find itself liable if its portfolio companies enter financial distress.
Join Mark and host Geoff Cockrell for insight on different situations a sponsor may encounter, the protection available to a sponsor who recognizes problems early and the benefits of taking a cautious approach.
Episode 16: The Professor’s Corner, October 28, 2022
Many investors take on an operating thesis that, by law, the obligations of investment companies are not the obligations of the investor. They apply this whether their fund has invested in the securities of a limited partnership, a limited liability company or a corporation.
In the first of two episodes, McGuireWoods partner Mark Freedlander joins host Geoff Cockrell to explore the limits of this idea. Tune in as they discuss preference statutes, fraudulent conveyance and patterns that emerge in troubled portfolio companies.
Episode 15: The Professor’s Corner, August 25, 2022
It’s nine to 12 — maybe even 18 — months after the deal closed. There’s an R&W policy in place, and the purchase agreement covers an array of representations and warranties. But you become aware of something that might be a breach.
In this episode of The Professor’s Corner, McGuireWoods partner and insurance recovery practice leader Tony Tatum joins host Geoff Cockrell to walk listeners through the process of filing a claim, citing the issues that might arise and errors to look out for at the onset. He also discusses the importance of gathering evidence, being thorough, advocating for your company and mitigating losses.
Episode 14: The Capital Corner, August 10, 2022
OB-GYNs and fertility providers present a range of opportunities for investors. Many patients see them more frequently than they do general healthcare providers, and advancing research and technology in the space continues to generate successful outcomes.
Tune in to host Geoff Cockrell and Baird managing director of healthcare investment banking Jason Porter as they discuss where the OB-GYN and fertility sectors differ, where opportunities in the sector are growing, and what providers and groups can do to be more successful as they shift to value-based care.
Episode 13: The Professor’s Corner, July 21, 2022
The women’s health sector is a diverse subset of businesses covering multiple specialties, including fertility and ancillary services. On this episode of The Professor’s Corner, McGuireWoods lawyer Kayla McCann Marty joins partner and host Geoff Cockrell to discuss women’s health investing — from models like de novo growth and acquisitions to regulatory compliance issues and future trends in this active sector of the market.
Episode 12: The Banker’s Corner, July 7, 2022
On this episode of The Banker’s Corner, McGuireWoods’ Geoff Cockrell invites Mikel Parker, a head of investment banking and managing director at AMB, to discuss current valuation trends in healthcare IT and other subsectors.
During their discussion, Mikel pinpoints four main sectors within the concentrated field and the two types of buyers he comes across in his work. Tune in to learn why healthcare IT continues to prove profitable and why companies are shifting from transaction-based models to recurring-based models.
Episode 11: The Capital Corner, June 14, 2022
The pharmaceutical services industry has piqued the interest of private equity investors over the last five to 10 years as more drugs move into development and high-quality science continues to grow.
On this episode of The Capital Corner, McGuireWoods’ Geoff Cockrell sits down with Dr. Bijan Salehizadeh, managing director at NaviMed Capital, to discuss the latest developments in the pharma services space within healthcare private equity.
Episode 10: The Capital Corner, May 31, 2022
In this episode of The Capital Corner, Pete Tedesco of Health Enterprise Partners joins host Geoff Cockrell to discuss post-pandemic demands within the healthcare industry and the growing interest in investment of niche healthcare sectors. Pete explains that it’s all about understanding the current industry climate — and it’s important to stay ahead of the curve.
Episode 9: The Professor’s Corner, May 16, 2022
In the healthcare industry, some significant compliance issues and violations can go unnoticed or implemented unintentionally. When addressing common healthcare mistakes like Stark Law violations or billing and coding issues, should one fix on a go-forward basis, address through indemnification in the deal context, or self-disclose to the government? The answer isn’t as simple as you might think.
Episode 8: The Professor’s Corner, May 2, 2022
In healthcare transactions, people often think antitrust issues are a big corporation’s problem, but smaller companies may be at risk, too — and not just for civil liability. The past couple of years have brought multiple criminal cases against individual healthcare providers and corporate entities alike.
In this episode of The Professor’s Corner, host Geoff Cockrell interviews Holden Brooks, a partner in McGuireWoods’ Antitrust, Trade, and Commercial Litigation Department, to discuss best practices for managing antitrust risk in the healthcare space. Holden details new developments and regulations to help you prepare for deals and avoid antitrust risk — no matter the size of your business.
Episode 7: The Professor’s Corner, April 20, 2022
Record-setting deal activity toward the end of 2021 strained the representation and warranties insurance (RWI) markets, directly impacting certain sectors including healthcare. This led to RWI policies with significantly higher rates and limited appetite for healthcare transactions. However, as we work through the second quarter of 2022, RWI prospects for healthcare transactions are looking brighter, with carrier appetite returning and rates settling.
In this episode of The Professor’s Corner, host Geoff Cockrell is joined by Sumit Agarwal, a senior vice president in Marsh’s Transactional Risk Group, and Sam Bell, a senior client executive and vice president at Marsh, who discuss how the RWI market reacted to the 2021 deal flow, the current state of the RWI market and returning carrier appetite for healthcare transactions.
Episode 6: The Professor’s Corner, March 24, 2022
When preparing a private equity-backed healthcare investment, a reps and warranty insurer can request two types of exclusions: general exclusions and specific exclusions. The end of 2021 showed a significant increase in general exclusions, which left companies exposed to risk under the False Claims Act. Though the trend started shifting in early 2022, general exclusions are still something counsel should examine.
In this episode of The Professor’s Corner, host Geoff Cockrell invites colleague and McGuireWoods partner Trey Andrews to discuss how to navigate general and specific exclusions when purchasing a reps and warranty policy.
Episode 5: The Banker’s Corner, March 4, 2022
On this episode of The Banker’s Corner, McGuireWoods’ Geoff Cockrell invites Barry Freeman, managing director of Lincoln International’s U.S. healthcare industry team, to discuss trends and investing opportunities in home health, hospice and palliative care. Barry shares his in-depth knowledge of the home healthcare space, including key takeaways from the recent Home Care 100 industry event. Barry also walks listeners through changes in the industry, where he believes the sector is headed and the advances being made to help manage risk.
Episode 4: The Capital Corner, February 28, 2022
On episode one of The Capital Corner, McGuireWoods partner Geoff Cockrell talks to Seven Hills Capital founding partner Matt Pettit about investing in the small to mid-sized healthcare market. As a former CEO of a dermatology practice management company who now leads a firm focused on first-round institutional capital investment, Matt speaks from experience on both sides of the healthcare services table.
Matt discusses why investing in small to medium-sized companies requires a much different approach than strategies larger-scale equity firms employ. He also explains why healthcare businesses need more than just capital and examines the importance of investors knowing their limits.
Episode 3: The Banker’s Corner, January 28, 2022
In episode one of The Banker’s Corner, McGuireWoods host Geoff Cockrell and WestCove Partners managing director Justin Hand discuss why investors have a responsibility to drive disruptive evolution in the healthcare business and how the competitive landscape impacts small and less-capitalized practices. Learn what’s driving healthcare exits and why there is more to partnerships for physicians beyond the cash considerations at the close.
Episode 2: The Professor’s Corner, December 28, 2021
In the premiere episode of The Professor’s Corner, McGuireWoods partner David Pivnick shared best board practices to mitigate risk when making challenging decisions. In this follow-up episode, David joins host Geoff Cockrell to expand on a larger trend in healthcare litigation: Private equity funds are finding themselves legally responsible for the activity of the companies in their portfolio.
Hear how qui tam rules increase the risk of qui tam plaintiffs naming PE funds and why investors have a responsibility to ensure proper conduct. Learn why, the darker the gray area of misconduct, the greater the risk is for everyone involved.
Episode 1: The Professor’s Corner, December 2, 2021
In the premier episode of The Professor’s Corner, McGuireWoods partner and host Geoff Cockrell is joined by McGuireWoods partner and complex corporate healthcare litigator David Pivnick. They discuss a recent whistleblower case in Massachusetts that challenged the widely accepted notion that private equity investors are insulated from risk beyond the scope of their financial investment.
Learn about the ruling’s implications for private equity funds and the gray areas of board-driven decision making. Find out about the “one purpose” rule and what Dave deems the red flag of document deliberation.
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