Spotlight on Healthcare – A Special Industry Report (First of a Series)

The private equity firm Platinum Equity announced last week they had offered to buy Johnson & Johnson’s blood glucose monitoring product for about $2.1 billion. The LifeScan Inc unit was one of several J&J businesses focused on diabetes devices. The medical products giant had apparently experienced declining revenues and squeezed margins in that arena and had been considering their strategic options.

As middle market lenders, we are always on the alert for sectors in which our borrowers could come under siege from large strategic corporates. That’s one of our featured risks. It’s less common when a major competitor exits an area of historic dominance. But clearly the world of healthcare is changing.

Over the next several weeks we will explore the healthcare industry from the perspective of private equity and private credit. What are the major trends? Which sub-sectors are favored? Which ones are problematic? How do sponsors think about growth strategies in services vs. products? Where is technology the most disruptive?

We’ll solicit the views of top firms – private equity and lenders – on how they’re addressing these and other issues in a leveraged environment.

But first let’s start with an overview.