October 15, 2018
Interviewed by: David Snow
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Podcast: Q3 2018 Dealmaker Roundup

Three veterans of the private equity middle market discuss the drivers of the booming deal market, the upward drift of deal sizes and valuation multiples, the increasing aggressiveness of corporate buyers versus private equity buyers, and why the healthcare deal market is surging.

Three veterans of the private equity middle market discuss the drivers of the booming deal market, the upward drift of deal sizes and valuation multiples, the increasing aggressiveness of corporate buyers versus private equity buyers, and why the healthcare deal market is surging.

Podcast: Q3 2018 Dealmaker Roundup

David Snow, Privcap:
Welcome to Dealmaker Roundup. I’m David Snow with Privcap. Today, we’re joined by a panel of seasoned experts in the private equities deal market. We’re going to talk about the trends through Q3 2018. We’re going to talk about what’s driving private equity deals in today’s very hot and dry market. We’re going to talk about the battle between strategic buyers and financial buyers on the auction block in the M&A market, and we’re going to hear about import trends in the healthcare center, with regard to private equity deal activities.

First, I’d like to ask each of our participants to briefly introduce themselves.

Michael Fanelli, RSM US LLP:
My name’s Mike Fanelli, a partner of RSM – the largest accounting, tax and consulting firm, 100% focused on the middle market. I’ve spend all of my time in the financial due diligence space, both on the buy side and sell side of transactions, primarily private equity and 100% middle market.

Snow: Geoff Smith, let’s hear from you.

Geoffrey Smith, Harris Williams & Co.:
Thanks. This is Geoff Smith. I’m a managing director in the healthcare and life sciences group at Harris Williams. Harris Williams is a leading M&A advisory firm with eight offices around the world, where we focus 100% on M&A advisory and on the middle market. I’ve spent 100% of my time in healthcare, and a big chunk of that in the world of healthcare services, although I am a member of the group, overall do a fair amount in products and devices as well.

Snow: Chris, do you mind giving a brief introduction?

Christopher Elvin, Preqin:
Absolutely. My name’s Christopher Elvin, I’m head of private equity and products. We’re less so at the shop and in the stick compared to Mike and Geoff, but we sit as a leading alternative assets data provider, covering and tracking deal activity across all those alternatives.

Snow: Great. Thanks to the three of you. Let’s get started. We have the statistics through Q3 of this year for Preqin and, in particular, we’re looking at private equity deal statistics. They show continued strong activity in the global private equity deal market. What’s more, Q3 with $93 billion in private equity deal volume, comes out to the first two quarters of the year, which saw a combined $250 billion in deal volume globally. That means 2018, with a full quarter left to go, has already matched the full year 2016 and is quite close to outpacing full year 2017. So, we are still in a very hot deal market and, before we get into specific silos (for example, healthcare), can the three of you tell me what you’re hearing about what’s driving activity? Mike Fanelli, you must be very busy these days. How was your Q3?

Fanelli: Q3 was great – a bit of a broken record, quarter to quarter here, but those deal value numbers that you have referenced are pretty impressive, David. Being in the middle market, and on the M&A advisory side, I actually track the deal volume and number of deals closed metrics pretty closely. Just quoting some numbers from Preqin, since the beginning of 2013, the average quarterly deal closed volume was about 1,090. The high is 1,274 from Q2 2018, and a low of 843, but that was back in Q1 2013. Compared to the quarter we just had, which was right around 1,200 as well, [they are] pretty impressive stats.

On our side, an interesting thing is that deal volume for us, on the advisory side, has increased even more so than what the closed deal stats have shown. This is due to sellers engaging us on sell-side due diligence, as well as in the competitive auction processes that Harris Williams knows very well. We’ve had multiple buyers going after one asset, in a pre-exclusivity period, and potentially multiple engagements in separate silos going after the same asset. So, we’re seeing even higher increases than the deal close volume stats have shown. I think there’s a wide variety of items we’re seeing in the deal market that are driving that robust activity, which I’ll get into in upcoming conversations here.

Snow: Thanks. Geoff, from your end as an advisor on the deal side and investment banker, what level of activity are you seeing?

Smith: Yes, I would agree. I think we are seeing continued tremendously strong activity very broadly across all the 10 industry groups that we focus on. It’s really driven by a few different things. One, obviously, certainly in the U.S., you have very strong fundamental macroeconomic trends that continue to support growth, so you’ve got a lot of people who are feeling good about the economy and you’ve got a lot of businesses that are performing well. As a result of that, you’ve got record level unemployment and there seem to be a lot of strong fundamentals to support it, as opposed to feeling like it’s a bit of a bubble, potentially. It doesn’t have some of those strong underpinnings.

I think that’s one. Two, there continue to be tremendous amounts of capital out there. In terms of dry powder in particular, what we have seen is, for both North America and European private equity firms, they are standing somewhere in somewhere in the neighborhood of $850 billion of deployable capital, which provides a tremendous war chest, frankly, that is looking for returns. And there are relatively low returns in a lot of other asset facets, so this continues to be one that people will be active in.

Then, three, you know the equity markets have been very strong – they were very strong in the third quarter, so you’ve got a lot of companies in the S&P and, more broadly, that are looking for ways to continue to drive growth and they view M&A as a really important way to do that, even as their organic growth provides a solid foundation. We see all of those driving what we’re seeing today and we expect that to continue for the foreseeable future.

Snow: Christopher, as someone who collects and tracks the statistics very carefully, what jumps out at you at this latest batch of data?

Elvin: Touching on a couple of things mentioned already, one is, from our point of view, the quarterly activity did … typically, for the last couple of years, has been somewhere around about 1,000 to 1,100 deals, but since Q4 we’ve had four consecutive quarters, as first mentioned, where that activity has been picked up to around 1,200 or more. So, there does appear to be a slight rise on a quarter-byquarter basis. Looking at the actual aggregate deal value, there have been peaks and troughs looking quarter by quarter, typically brought around by quarters in which particularly large deals occur.

But taking a step back from the actual deal focus and, again touching on the dry powder point, the real driver from our point of view, as we look at things in terms of private equities, has been the stellar fundraising period we’ve seen for the last four or five years. Going back to the previous buyout boom era, pre-crisis, there were three consecutive years in which more than $300 billion was raised by private equity funds. We’re now in the fifth consecutive year in which more than $300 billion has been raised and, in fact, last year was the first year we’ve ever seen more than half a trillion dollars raised in one year.

So, the wall of capital that fund managers have at their disposal means that potentially things are only beginning. The biggest problem from private equity firms’ point of views at the moment (or rather, it’s not necessarily a problem, more a challenge), is high entry prices for assets. Our surveys confirm that, in terms of what is that going to mean in terms of the longer-term performance for private equity funds in delivering for investors.

But, that said, bull market conditions – it’s a theme common to most asset classes today and the reality for these firms, private equity firms, is that they have to deploy capital throughout the cycle.

Snow: Great. Mike, I want to get back to you. You mentioned, obviously, being quite busy and you gave some examples of that. You also said you would comment on what you thought were the drivers of this activity.

Fanelli: Yes. I very much agree with both Geoff and Chris and both their points. Then, a couple other things we’re seeing in addition to the previously mentioned commentary are, in addition to private equity, you have these … the cash on these corporate balance sheets that would seem to be they’re finally putting it to use in the M&A sector, which is great. You also have large corporations seeking to divest non-core assets, which seems to be at a higher rate than we previously saw. Doing a ton of carve-out transactions, whether the buyer is private equity or a corporate strategic acquirer, there is a slew of corporate carve-outs going on.

And the fundamentals that Geoff quoted earlier are all true. The fundamentals of the accounting seem to be very good on basically all fronts. However, there are certain businesses, either corporates or platform businesses at private equity firms, that are still needing growth and are not getting enough of it organically, and/or they just want to grow faster than they currently are. So there are these significant desires to either expand into international markets, to acquire new and/or better technology, then also just general expansion or diversification within products or services to buy that growth that they may not be getting from an organic perspective. All those things, in addition to … I actually think the add-on percentage was a bit lighter than normal in Q3, but there’s still this phenomenon of add-on activity because of consolidation within fragmented industry sectors, and a lot of lower middlemarket deals being done in roll-offs, which is one of those drivers to the high total deal volume of deals closed in these recent quarters.

Snow: I’d like to look at a statistic from Preqin, which says that fully 67% of capital deployed in Q3 was in a deal greater than $1 billion in value. Now, we all know that most deals done in the private equity landscape are lower middle market, middle-market deals, yet there’s been a slew of $1-billionplus deals, which suggests that the very largest private equity firms are very active. Is that consistent with what you all have been seeing? Starting with Geoff?

Smith: Yes, I think it is very consistent. I think we have seen – certainly at Harris Williams, our average transaction size has increased substantially and the way we think about the middle market has changed as well in terms of overall size, where not even a few years ago, you probably would have thought of a traditional middlemarket deal as being a few hundred million dollars. Nowadays, we’re doing a pretty high percentage of $1-billionplus deals, up to $2 or $3 billion with some regularity. And I think that’s a function of some of the things we’ve talked about: private equity firms with more capital to put to work, looking for different ways to that. I would agree with Mike’s comment about more corporates doing carve-outs and private equity firms and others looking for ways to capitalize on those. Again, it gets driven by this available capital out there, looking for ways that they can put bigger dollars to work in big deals.

In some cases, frankly, multiples have increased pretty significantly, depending on what sector you’re looking at. So, we have seen, in healthcare services, for example, where you might have said even 18 to 24 months ago, 13 times would be a very good multiple for some healthcare services deals. We’re now seeing, in some sectors, multiples in the 16, 17 or 18 times. So, you’ve got strong fundamental businesses, you’ve got capital chasing those, but also, frankly, you have upward pressure on multiples that are resulting in much larger transactions.

Fanelli: Yes. There’s been some record-breaking PE funds raised recently, too. And the largest of the PE firms, in terms of total AUM – Carlyle, the Blackstone, KKR, Apollo, Warburg, etc. – are finally … keen to be finding places to actually put their money to work in this marketplace.

The interesting fact about the greater-than-$1billion market in Q3 2018 is that I couldn’t find a real consistency to a message of why and what’s happened. Was it a certain industry, certain size, certain location, etc.? You had various geographies – U.S., Ireland, Bermuda, Germany, China – all represented in terms of those greater-than-$1-billion deals closed in Q3. Then, various industries, information services, insurance, healthcare, chemicals, oil and gas, the list goes on. It’s almost like a different industry for every single business that was closed. So, that ties a testament to the overall global M&A market, both middle market and upper middle market, both private equity and corporate strategic being … humming along and being efficient as well.

Now, down the path in 2019 and the future, who knows how long it can sustain itself, but the capital sure is there. The professionalism within the marketplace is there, so it’ll be interesting to see what the future brings to this marketplace as well.

Snow: Christopher, what do people need to keep in mind when looking at average deal size? What does that indicate and what’s a pitfall they need to avoid?

Elvin: I kind of echo the thoughts there about trying to identify trends when perhaps there aren’t necessarily any. There is always some element of caution when looking at a given quarter in focus, because a particular deal or particularly large deal can blow up figures or present trends that wouldn’t necessarily be deemed a trend. But some interesting things to look at there, is more all of these average deal size, average fund rate. They are all getting larger, and the concentration capital as well amongst the large CVs. Everybody else is left perhaps slightly behind in some terms. But particularly leading up to wider trends and commentary going on in terms of interest rates and political instability – that’s looking at aggregate deal value.

Perhaps if you get into some of the more close deal and information, looking at what’s the mix of equity to leverage and so on, and start looking at those trends, that those are perhaps some pitfalls not to fall into, just looking at total average size as a standalone figure, as it were.

Snow: Great. I’d like to talk about corporate balance sheets and behavior of corporate buyers of private companies. Mike, you mentioned earlier that you’ve seen evidence that they’re finally starting to put their mountains of capital on their balance sheets to work. If you look at the Preqin statistics, there is an interesting further evidence of this. We see that, in Q3, the vast majority of exits – in other words, the sale of a company from a private equity firm to another entity – were to strategic buyers, meaning to corporations as opposed to selling them to other private equity firms or selling them to the public in an IPO. First question for Geoff. There’s always that give and take on the auction market between financial buyers and strategic buyers. Are you seeing evidence that the strategic buyers are a bit more aggressive these days?

Smith: Yes, for sure. I think they definitely are being more aggressive. They’re trying to pick their spots, obviously, and to be selective in making sure there’s a story for why they’re doing what they’re doing. But it’s probably true in every sector. You certainly see it in healthcare as companies continue to try to figure out what healthcare in the future is going to look like, at least in the U.S.

The other thing I would say is, I think a lot of the strategics (and this isn’t a recent phenomenon) over the last several years have gotten much more sophisticated from an M&A process perspective. We are seeing more corporates that have … not just corporate development or business development groups, but those groups are either comprised more of former private equity folks or investment bankers, and are more sophisticated in terms of how they think about deals and their ability to move more quickly.

It’s not unusual for us – and we’ve done this very recently with some very large strategics – to sit down and have conversations with them after a process, whether they won or lost, and talk to them about their specific performance and how they performed relative to other strategics, and/or relative to private equity firms. They are trying to learn from us how to do a better job at this so that we can keep up with the Blackstones, the KKRs and the Carlyles of the world. Or my competitors in the marketplace who, for whatever reason, may be doing a better job of competing in a process, getting in front of deals earlier and thinking about those sorts of things.

Snow: Mike, what are you seeing in your work with regard to the dynamics between financial bidders and companies, and strategics?

Fanelli: Looking at those stats, I’d actually be interested in a follow-up question for Geoff  on this. Because, many times, a PE firm goes into an investment with the exit in mind, maybe 100% of the time, right? They’re already thinking about the exit when they go into a process to acquire a business. And, many of the times, that exit plan is to a strategic buyer. Now … that’s different on an industrybyindustry basis, for the most part, but that seems to be the plan, typically.

Now, at the end of the day, whether it ends up going to a private equity firm or a strategic buyer depends on various things [around] how the company actually performed, how the process was run and what it’s like five years later or what have you, when they’re actually going to sell the business. But, with that in mind, in connection with, like I mentioned earlier, the cash on corporate balance sheets, repatriation of overseas cash and other matters from an overall economic environment, these corporations are looking for more avenues for growth, one of which is M&A. I do agree with Geoff that many corporates are becoming more sophisticated in processes, although from a global perspective, still not as sophisticated as a private equity firm in most instances.

But I think all of those items relate to the numbers we saw of private equity exits going more toward selling to strategics as opposed to sponsored deals, although those are still in the mix as well. So, I’m interested to hear Geoff’s perspective on what is it like to be a sell-side investment banker going into a process of a PE backed company? What is the typical exit strategy, knowing that there is no typical and it depends on a companybycompany basis?

Smith: It’s a really interesting point that you bring up and I agree with you. I [agree that] every private equity firm, as they are entering investment, is saying, “But how do we exit to a strategic?” Because at least conceptually, a strategic should be able to pay more. Whether that’s a pure corporate or that’s a private equity-backed strategic, they’re looking for a synergy-based value, or some value like that, which should be more than what you get in a traditional private equity exit. Plus, frankly, your IPs love to hear that you’re selling to a strategic, etc. So, I do think that when a private equity firm is buying a new platform and they’re thinking about that exit, they are thinking very specifically, “How do … we continue to help this company grow and build this company going forward? How do we do that in such a way that there is very clear path to who we think the right strategic might be?”

I think there are a couple of things that happen. One is, and I’m getting ready to do this for a business that we just sold, literally having a conversation with them about what the process looked like, what kind of interest did we get, what were the things that we heard from the market about what folks liked about this business or didn’t like about this business, how it fits or didn’t fit with particular strategics. Trying to learn that from your banker is really important, in a way that we and our brethren can add a tremendous amount of value, post-transaction, for these companies as they’re thinking about how to build a business.

So, that’s one. I think the other that’s becoming increasingly common is that private equity firms and the companies they own are establishing a relationship with a logical strategic acquires much earlier than they used to, and having proactive dialogue with them almost out of the gate, and saying, “What is it that makes this business interesting to you, or not? What could we be doing to make this a more valuable business for you down the road?” Recognizing that we’re not going to be selling for three to five years. And that’s a level of dialogue that I don’t think we saw several years ago; it goes back to the level of sophistication among these strategics to actually be able to engage in that dialogue and to allow that to start a conversation that continues over the whole period of that private equity firm.

It makes it that much easier for the strategics to end up buying. Because we’ve seen lots of deals out in the market where there was no process necessarily, or you didn’t hear about it, and all of a sudden, the strategic pops up and they’re acquiring some business and everybody goes, “Oh, that was a surprise.” Well, it wasn’t surprise to the private equity firm, the target company or the strategic acquirer. That’s a dialogue they’ve been having for a long time.

Elvin: I think the other thing, from a private equities firm’s point of view, looking at other exit routes, is the appeal of strategic acquirers in terms of a single buyer who’s often able to complete the transaction in a relatively swift and clean period of time, compared to an IPO or a sale to another GP, where you might be having to deal with conflicts of interest with investors at your fund being in the other fund. So, it’s more of an ideal for them from that point of view as well.

Snow: Yes, Christopher, I’m glad you brought that up because, as strategic buyers, corporate buyers, are appearing to flex their muscles a bit more, it comes on the tail of a long rise of sponsortosponsor transactions, which not every participant in the private equity market applauds as the right direction. Why don’t we move on to a very important part of the M&A market, and that’s healthcare. About 13% of the deals done in Q3 were in the healthcare sector. Geoff is someone who specializes in healthcare deals and has worked with a lot of private equity buyers in that space. What are you seeing in the current market that is unique or interesting? Of course, Mike and Christopher, I would love for you to have follow-up comments or questions for Geoff.

Smith: I think there’s a lot going on in the world of healthcare. Certainly, just to speak about the U.S. for a minute, we are in an environment where the healthcare world is changing and you see it in a couple of different ways. Two specific trends we’re seeing a lot are … a continued movement on the post-acute world (for example, outside of a hospital), to a move toward value-based care or a value-based construct. You can see that in the mega deals that are happening among the big healthcare payers out there. That trickles down throughout the market as people try to figure out … in a world where we’re going to have to be able to demonstrate value in order to get paid, what do we as healthcare companies need to do? How do we need to operate? How do we need to partner?

So, you’re seeing a tremendous amount of activity that’s being driven by that, because I don’t think there’s any clear answer yet among any of the sectors or sub-sectors that you find. So, you see a lot of people trying to figure that out. You’re seeing payers and markets starting to move and buying up physicians, for example, so that they can own the supply of physicians within a network and doing things like that.

So, that’s one big trend. Then, you’re also seeing, on what I would try the less healthcare-heavy world of healthcare, a real move toward the consumerization of healthcare, or retail healthcare more broadly. You’re seeing the impact of companies like Starbucks, Amazon and Nike, and places like that, that have literally changed the way consumers interact with companies and what they expect from their service providers. And that has already started moving into the world of healthcare, but the pace of that movement is accelerating much more rapidly recently than it did even a couple of years ago.

So, people’s expectation of being able to get access to healthcare – to be able to have an experience that mimics the experience they’re able to get in every other aspect of their lives, the ability to get data on the healthcare they’re looking for – are all trends that come out of retail, or consumer more broadly, that has been incredibly slow historically to actually impact healthcare, are now doing that in a much more significant way. It’s an area that we as a firm have spent and are spending a lot of time looking into, because we think that is going to be a huge driver of healthcare going forward. And you have seen massive multiples – 18, 19 or 20 times EBITDA and above – for businesses that private equity are looking at and saying, “We think these guys are playing that trend and are well positioned to benefit in that world.”

Fanelli: Geoff, do you think we’re at the really early stages of that, too? Because, when I look at it, healthcare always seems to have been behind the rest of the world in terms of sophistication, professionalization, big data, data analytics. To your point on the consumer behavior services side, do you think that’s happening right now where we’re really at the early stages and a lot of room to grow, could see some significant impact of that in the next couple years?

Smith: Totally. Yes. In me talking about it, I’m making it sound more developed than it is. If you think about it in terms of innings in a baseball game, I think we’re in probably the first … it varies a bit by sector, but I think you’re in the first or second inning for a lot of these. And we see things in the healthcare market, like JP Morgan and Berkshire Hathaway and Amazon coming together to create something. Nobody knows what it is yet, but … people are trying to figure out how to do this differently. And I think that’s why you’re seeing the amount of activity in healthcare, particularly in the services side, as people are saying, “I don’t exactly know how this is going to work, but I kind of understand some of these fundamental trends.”

To your point, Mike, I think people look at it and say, “Well, if retail is a model broadly, how has retail developed over time? What are the sectors within healthcare that are more retail-like? Those are more likely to move more quickly. How will that flow down through?” But yes, I think we are way early days in that. That’s partly why you’re seeing so much interest among investors.

Fanelli: Yes. I wanted to follow up and put a bow on that, because I totally agree with what you said. It’s extremely early in terms of all of that actually happening in the marketplace. There are some that are definitely doing that already, but this could be a really interesting thing to track for the next five or so years, in terms of what could be driving the healthcare M&A activity at all levels, lower middle market, core middle market, and the large deal sector. Because you also have this general, some of the generic healthcare M&A aspects to it, the overall aging population, this further development of new age drugs and devices, these fragments and inefficient delivery systems, i.e., the actual physician practices and otherwise.

Because, on that topic, we see a ton of these physician practice roll-up strategies: dentistry, dermatology, eye doctors, etc. And they’re tough to do, right? Because you got way too many people involved. You need to change, whether it’s 20 single-location doctor practices or groups of 20-physician doctor practices, and bring them all together and change it into a more corporate structure. There are a ton of efficiencies to be gained, there’s a ton of cost savings to be gained, there’s a ton of big data and analytics to be used. They’re very difficult to integrate make into one seamless, larger business, but there is a significant amount of that going on in the lower middle-market sector.

Elvin: One question I would have, Geoff, is obviously a lot of sectors are particularly benefiting from the ongoing technological advancements that we’re having, but do you think healthcare, in line with some of what you’re saying already, is particularly well-suited to further innovation? And, coupled with that, makes it even more of a potentially attractive sector going forward?

Smith: Yes, absolutely. It’s interesting, as we look at these businesses, I remember a few … I spent a disproportionate amount of time in retail healthcare and multi-site healthcare, and I remember a few years ago talking to companies about Yelp scores, and that that was something that people were starting to do, and posting about their experience and their physicians and those sorts of things. And talking to companies like, “Hey, you need to have a strategy for how you’re going to manage this.” Now, that’s sort of, so 24 months ago. Now, it’s much more about, how are you going to engage with your customers or patients in a world where everybody is carrying an iPhone around and expecting to be able to schedule an appointment electronically, and everybody wants to be able to see the background and feedback on a particular physician or a physician practice?

Nobody’s going to go and sit in a doctor’s office and wait an hour to maybe see a physician for two minutes, but you’re with the nurse. I mean, we’re not used to that. We want to be able to click on our Starbucks app, we order what we want, it’s there when we walk in, and we walk right back out. Consumers are looking around saying, “Why should it be any different in healthcare?” So, the way that gets enabled absolutely is through technology.

Interestingly enough, this is not, as we’re seeing, a U.S. trend only. I was just over in London, Frankfurt and Munich a couple of weeks ago, talking with healthcare investors there about this very topic. And, while in some of those countries, some of the sectors are a few years behind the U.S., the technology aspect of it is global, so the expectations that people have about the way they should be able to access care in European and other countries is not really any different than it is in the U.S. And technology is actually making it easier for those people to move more quickly in that direction as well. It’s something that we’ve seen, for sure, in the U.S., but it’s also having a bigger impact globally.

Snow: I have a question about the topic of actually putting capital to work in the healthcare sector broadly defined. It seems like the big trend is the marrying of new technologies with legacy approaches to providing care. And, on the technology side, isn’t that largely a venture capital and growth capital play and less of a big buyout play? Or is it not that simple?

Smith: I’m happy to take a crack at it. I think it’s a bit of both. One, I don’t think it’s quite that simple or that bright a line, but I think it is fair to say that, historically, you might have seen a bit more of a bifurcation among the type of firms and the size of firms that would be interested in earlier stage or marrying technology in the traditional sense with care, whether that’s medical devices or it’s more on the services side where technology is supporting it. But some of that goes back to what we were talking about earlier, about the amount of capital that’s out there, of larger funds that are being raised and people looking for ways to play big healthcare trends earlier.

So … every mega fund now has got a small fund within it, or ... they call them different … KPR has a core fund where they’re looking at a lower return, longer hold period, very different dynamic than the way you traditionally think of them or their brethren in the world. And I think that’s giving them more flexibility to be able to go out and do some of these smaller things that used to be the realm primarily of VC or growth capital.

Fanelli: Also … there’s a pure core healthcare technology plays, which can go back and forth between traditional VC and private equity, to your point, both David and Geoff. But you also have these core healthcare services, business, actually acquiring and utilizing and implementing some type of digital technology to be able to make their business either more efficient, more effective, add on to consumer engagement, help with revenue cycle management, actually having a cyber-security plan and process, utilizing big data and analytics, which we (for some odd reason) don’t see enough of within middle market, and just overall billing and cash collections aspect of healthcare providers that drives me nuts.

I don’t understand how it’s moving in the right direction, but it still seems to be so archaic, and so many mistakes being made on billing, cash collections and overall revenue cycle management. Forget billing enough, but billing them lower, especially in the lower middle market, core middle market – it’s amazing to me the lack of, or the slow adoption of, technology in the sector. I think it might be the only business still using fax machines. Somebody asked me for our fax number the other day, and I was like, “What do you need that for? You’ve got to send something to your doctor? Because, otherwise, we don’t know anyone you need to send something to a fax machine for.”

Snow: I enjoyed talking to the three of you. I learned a lot. Thank you so much for being part of this, and hopefully we can have you all back to a future conversation.

Unison: Thank you.


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