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Currently healthcare has been noted as a safer bet for acquisition due to being labelled as recession proof. Is that really true in your opinion?
My response comes from working in IT Pharma M&A. Recessions absolutely impact the frequency of acquisitions. After all, firms need to be able to weather the financial storms which recessions bring. Typically, when the economy is good and firms are flush with cash, they will go on acquisition sprees and set lofty goals to acquire x firms a year. But when the economy starts to slow, firms start to acquire dry powder for their next purchase. Those firms which have blockbuster drugs or have benefitted immensely from producing covid vaccines are still buying. Pfizer’s Seagen acquisition is a good example of this.
I would imagine the healthcare sector is highly broad and diversified. Some may be of stronger recession proof than others, such as essential pharma or medical hospital healthcare providers. However other parts of healthcare, such as more the aesthetic or non-essential clinical practices may be not so recession proof as they depend on high discretionary spend to fund those purchases by consumers.
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