Industry Q&A – Marc Cooper with Ryan Stewart

Industry Q&A – Marc Cooper with Ryan Stewart

by CEO Marc S. Cooper

I recently sat down with Ryan Stewart, a Partner at the firm who leads our efforts in the Healthcare Technology and Tech-Enabled Services space. We talked about his recent Collaboration Summit in Cape Cod, deal momentum and his outlook for the healthcare tech sector in these turbulent times.

1. This September marks your two-year anniversary at Solomon Partners. As you look back, what stands out from your experience so far?

The collaboration across the firm has been tremendous and rather timely as healthcare tech converges with many of our core and emerging verticals such as Consumer Retail, FinTech and Business Services, to name a few. Additionally, as most financial sponsors are seeking to enter or expand their presence in healthcare technology and tech-enabled services, it’s been a ‘hand to glove’ fit with Sash Rentala, who heads up our Financial Sponsors group, and his team.

As the firm adds more sector expertise in software, data & analytics, industrials and other new areas, the opportunities to collaborate to best serve our clients will just continue to compound.

2. Speaking of collaboration, you recently held your first Healthcare Tech Collaboration Summit since COVID up in Cape Cod, which was terrific. Tell us a little about it.

It was a lot of fun, and after more than a two-year break during COVID, it was amazing to be back on-site at the Chatham Bars Inn with 125 of my closest colleagues, clients and friends. The summit takes place over two days and nights where we kick off each year’s event with a fishing tournament and anglers’ dinner for about a quarter of our guests. We network, laugh and – yes –  catch a lot of fish in the late September run of striped bass and albacore tuna on the Cape.

We then move to our main event where we cover some of healthcare’s most important topics and how the application of technology is reshaping the entire healthcare experience for all – payers, providers, employers and consumers.

What’s really important at events like our Collaboration Summit is to have the ‘right’ people in the room, leading and participating in these important discussions. I’m very proud and grateful to say that we absolutely had those people – all 125 of them, many of whom are return visitors from the five years of hosting this event pre-COVID.

I think we were also focused on the ‘right’ topics with this group of senior influencers across private equity and venture capital and top healthcare executives. These topics included the mental health epidemic currently facing our country, the future of primary care with new payment reforms and virtual engagement, the emerging role Health Equity within both our industry and economy and, of course, the future role of data analytics in nearly every facet of the industry’s transformation.

We’ll be back in Cape Cod next September and look forward to welcoming some new faces to this tremendous ecosystem of healthcare tech collaborators.

3. You’ve had a busy year and closed a very interesting transaction this fall. Do you expect the momentum in your space to continue despite the broader slowdown in M&A?

I do. I think the market is more discerning and looking for more unique businesses than we’ve seen in the past. However, for those companies, the healthcare tech market remains open for business, and most certainly remains active in the middle market where there is less of a reliance on debt financing.

We recently completed a yet-to-be-disclosed transaction that is a perfect example of a company with a first-of-its-kind value proposition and a very high growth / high margin profile, which resulted in a deeply competitive process with multiple suitors until a top-tier sponsor differentiated their final proposal, securing them the investment. In this situation, we had multiple final bidders working with a ‘must own’ mentality, which gives me even more conviction that the market remains open for these top-tier businesses and unique situations.

We also just saw Welsh Carson and Hg’s Norstella join with Warburg’s Citeline in a $5 billion pharma-tech combination, where all firms remain very much engaged in the long-term value creation story. As you recall, we advised on the sale of Panalgo, a market-leading real world evidence data analytics platform, to Norstella last fall. It was reassuring for us all to see the continued emphasis placed on their Intellectual Property in this large cap combination of multiple pharma-tech platforms.

We’re currently in market with another unique healthcare SaaS business and we have a growing pipeline for next year, which gives us further confidence in the continued strength of the healthcare tech sector going forward.