Private equity-owned businesses accounted for a high number of bankruptcies in the health care sector last year, and another wave of distress looms, according to a new report from an advocacy group that monitors the sector.
PE-backed firms accounted for at least 17, or about a fifth, of the 80 bankruptcies of health care companies last year, the Private Equity Stakeholder Project said in a report due to be released Wednesday. It called 2023 a “record year” for large health care bankruptcies. Also, venture-capital-backed companies made up another 12, or 15%, of the filings, it said in a study that looked at companies with liabilities of more than $10 million.
“The health care default and bankruptcy wave is projected to continue in 2024 as companies are increasingly facing credit rating downgrades and potential defaults – and most of the companies at the highest risk are owned by private equity firms,” …