Banker’s View of the Current M&A Market, With Hector Torres of DC Advisory

Deal by Deal: A Private Equity Podcast

On this episode of Deal-By-Deal, host Greg Hawver is joined by investment banker Hector Torres, Managing Director of DC Advisory’s global healthcare team, for a discussion on the new normal in the M&A market, especially involving the healthcare industry.

Hector explains that, while market activity is starting to level out from the torrent of transactions in the second half of 2021, the lower middle market and middle market are still thriving. Flexibility is now the hallmark of successful deals, with parties increasingly creating bespoke processes to better meet their goals.

Hector also provides guidance to independent sponsors and other private equity buyers seeking to win actionable deals in the current environment.

Meet Your Guest

Name: Hector Torres

Title: Managing Director at DC Advisory

Speciality: Based in the Chicago office, Hector is a Managing Director in DC Advisory’s global Healthcare team. Hector has over 16 years’ investment banking experience, specializing in M&A and strategic advisory transactions. Before joining DC Advisory, Hector was the Co-Head of Healthcare Investment Banking at FocalPoint Partners, where he led a national team of M&A and Capital Markets professionals focused on hospitals and health systems, physician practice management, post-acute care and other related healthcare sectors.

Connect: LinkedIn

Acquired Knowledge

Top takeaways from this episode

• State of play in the healthcare industry. After the last year-and-a-half’s “perfect storm” of low-cost capital, high demand for healthcare services and assets, and record levels of private equity fundraising, the market is starting to cool off again.
• Back to basics. Buyers and their underwriters tend to have great confidence in the viability of the investment, but Hector is seeing that lenders are scrutinizing everything in unprecedented ways. Therefore, having a credible base case and performance attribution for the growth case is vital.
• Maintaining flexibility. Recently, we’ve seen assets wanting to retain flexibility to only make the deals that meet all their goals, so they are “tiptoeing” into the market and being patient. This requires heavy preparation on the sell side, including putting together market studies, a full financing package, and the quality of earnings and revenue.

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