Mergers and acquisitions seen as leading growth strategy in GE Capital survey.
Seventy-seven percent of healthcare executives expect business performance to be stronger in 2014, according to a survey released today by GE Capital’s Healthcare Financial Services business, and nearly the same percentage (75%) plan to invest aggressively in their business over the next 12 months, employing various strategies. M&A was cited as the primary strategy (38%), followed by revitalizing existing offerings (36%) and launching new segments or lines of business (26%).
GE Capital conducted the survey in advance of the JP Morgan Healthcare Conference, held in San Francisco Jan. 13-15, 2014. Respondents included 418 senior executives from pharmaceutical and medical technology companies, hospitals, healthcare service providers and health systems, as well as other industry stakeholders, who discussed their industry and company outlook for 2014.
“While there is uncertainty for many of these companies about exactly how the Affordable Care Act will affect them, a large majority are confident that 2014 will present attractive investment opportunities to drive growth,” said Al Aria, senior managing director of GE Capital, Healthcare Financial Services’ corporate finance team.
Additional findings from the survey include:
Industry Outlook: 54% of respondents anticipate the healthcare industry will perform more strongly in 2014 versus 2013. Thirty-five percent forecast it will perform the same with just 11% expecting it will perform weaker.
Challenges: More than half (57%) of respondents believe the Affordable Care Act changes / implementation will be the greatest challenge for the healthcare industry in 2014, followed by regulatory scrutiny (20%) and the U.S. economy (13%). Far fewer executives cited challenges in access to financing (8%) and rising interest rates (2%) as their predominant concern.
Financing: 55% of respondents noted that acquisition financing will be most important form of financing for their business over the next 12 months. Respondents also cited recapitalization driven by company-specific considerations (16%) and refinancing to extend or improve terms on current credit facilities (14%) as top-of-mind in 2014.
About GE Capital, Healthcare Financial Services
With in-depth industry knowledge and expertise, GE Capital, Healthcare Financial Services has provided more than $65 billion in financing to companies in over 45 healthcare sub-sectors including healthcare services, senior housing, hospitals, medical offices, outpatient services, pharmaceuticals, and medical devices. Our team of professionals creates business and financial solutions tailored to meet the individual needs of our customers. For more information, visit gecapital.com/healthcare.
Source: GE Capital, Healthcare Financial Services