Healthcare Services – A Key M&A Driver

Healthcare Services - A Big M&A Driver Private hospitals and clinics have usually been the main reason for M&A activity in Vietnam's healthcare sector. This trend is likely to continue because the market conditions are good. More older people are aware of their health, and they have more money to spend on good healthcare. Public hospitals in big cities are often very crowded. Vietnam has only 3.1 hospital beds for every 1,000 people, which is less than what the World Health Organization (WHO) recommends. So, there is room for more private healthcare. The government also supports this by planning to have 10% and 15% of private hospital beds out of all hospital beds by 2025 and 2030. Private hospitals and clinics are still appealing, especially as more patients come back after the pandemic, and expensive medical services become popular again.

Important Trends

• Focus on big general hospitals: Big deals involving private general hospitals are getting a lot of attention. Investors, both strategic and financial, see good profit margins, healthy cash flow, and many patients.
• Specialty clinics are becoming more popular: Healthcare companies want to buy specialty clinics to offer more services. They are investing in eye and cancer clinics, for example.
• Going to smaller cities: Foreign investors are looking at places outside of big cities because they see opportunities in smaller towns.
• Wanting healthcare companies with many places: Big healthcare companies with many facilities are interesting for investors because they can grow and make money.

In the pharmaceutical industry, there is no limit to how much foreign ownership you can have. This means local and foreign companies can work together. Foreign companies see this as a good chance to enter Vietnam's pharmaceutical market, which is expected to be worth $16.1 billion by 2026. Even with economic problems worldwide, pharmaceuticals are still a good industry because the government wants to make more medicine in Vietnam and not depend on imports.

Some growing areas in this industry are:

• Health-tech: After the pandemic, people are more interested in health-tech. Startups offering virtual healthcare services are getting more popular.
• Diagnostics: There are many small diagnostic services, and they can become bigger networks.
• Medical equipment: Most medical equipment is imported, but local companies that make high-quality things are getting noticed.

In the future, the healthcare sector will still be interesting to investors. People who know this market well have an advantage. Even though there are challenges with prices and checks, we think there will be many healthcare opportunities in Vietnam.