Fitch: Scrutiny of Private Equity Deals Is Short-Term Positive

Increased federal scrutiny of healthcare mergers and acquisitions is expected to have mixed consequences for providers’ credit, particularly when private equity buyers are involved, according to Fitch Ratings. In the short term, more government intervention of deals may help improve company credit profiles because private equity acquisitions frequently increase a company’s debt load and restrict cash flow, Fitch said in a report. However, more limits from the Federal Trade Commission could shrink the potential buyer pool for healthcare transactions, increasing refinancing risk and creating additional risk if other entities are investigated, Fitch said.

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Source: https://www.modernhealthcare.com/mergers-acquisitions/fitch-ftc-providers-credit

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