A report from a health-care sector advocacy group has revealed that private equity-owned businesses were responsible for a significant number of bankruptcies last year. The study, set to be released Wednesday, found that PE-backed firms accounted for about one fifth of the 80 health-care company bankruptcies in 2023. This constituted at least 17 bankruptcies, making it a “record year” for large health-care bankruptcies.
Additionally, venture capital backed companies also contributed to the number of bankruptcies in the health-care sector. The report indicated that these companies made up 15% of the filings, with another 12 companies declaring bankruptcy. The study specifically focused on companies with liabilities exceeding $10 million.
The prevalence of bankruptcies among private equity and venture-capital owned businesses in the health-care sector highlights financial distress as a pressing issue within the industry. As the report suggests, there is a looming wave of distress that may continue to impact companies in the health-care sector moving forward.
