Healthcare Sector Comment: Care home market ripe for M&A

The global elderly care market is expected to achieve a value of $1,767bn by 2025, which will reflect a CAGR of 8.4% between 2017-20251.

With an ageing population, due to increased life expectancy and more manageable chronic conditions becoming more manageable, the care market is set to grow. Another important driver is the rising preference of outsourcing care in volumes, to hospitals and healthcare institutions. Institutional care currently accounts for 66.6% of all global elderly care, with the remaining made up of community-based care and home-based care2. These factors are anticipated to boost revenue within elderly care1.

Care home providers in the UK are experiencing growing pressure. Currently the 4 major care providers supply c.14% of the c.400,000 available beds in the UK3. This demonstrates that the UK care home market is very fragmented and ripe for M&A activity. Recent news stated that both Care UK and are Barchester Healthcare have been put up for sale are looking for potential buyers, providing further evidence that there is an opportunity for a potential entrant to consolidate the UK market.

1Global Elder Care Services Market to Reach US$ 1,767.3bn by 2025
2Global Market Study on Elder Care Services: High Demand for Institutional Care to be Witnessed in the Next Eight Years
3(CommunityCare) – Care home numbers fall ‘rapidly’ but new homes offering more places


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