Healthcare private equity: navigating a non-standard deal process

Healthcare private equity remains an attractive asset class, but it is becoming harder to execute within it. At McDermott Will & Schulte's HPE Europe conference in September, a panel of healthcare investors, including three members of the European Healthcare Investor Association, discussed how deal processes are changing and how investors are adjusting their approach. The session was moderated by Fatema Orjela, partner in the private equity team at McDermott Will & Schulte, who observed at the outset that hardly any transactions across the value chain this year have involved a standard auction process.

The traditional private equity auction, which moves in a predictable sequence through diligence, bids, exclusivity and signing, is under increasing pressure. Panelists reported a much wider range of outcomes. Some processes never reach exclusivity. Others advance quickly before a new bidder appears unexpectedly. Transactions that seem lost can also resurface weeks or months later if the agreement with the winning bidder does not complete. One panelist described "non-process processes," in which buyers receive information and are invited into discussions without necessarily knowing whether they are participating in a formal sale.

The consequences extend beyond process. Investors can no longer assume a defined path, and this uncertainty is lengthening deal timelines and prolonging disagreement over valuation. The panel emphasised that conviction and relationships have become more important in this environment, and that specialist differentiation is one way investors are adapting. The discussion points to a market where sourcing, bilateral engagement and patience carry more weight than they did under the conventional auction model.