GE Capital Grows U.S. Healthcare Financing 20% in 2014
GE Capital, Healthcare Financial Services provided more than $10.5 billion in financing to customers across more than 240 transactions in 2014, an increase of 20% from the prior year. For the third consecutive year, GE Capital was the top lead arranger for healthcare financings up to $1 billion in size, according to Thompson Reuters.
HFS is active across 45 healthcare segments — including senior housing, outpatient services, pharmaceuticals, medical devices, hospitals and medical offices, and life sciences — financing acquisitions, refinancing existing debt, supporting working capital needs and funding early-stage commercialization efforts.
“While many segments in the healthcare industry are experiencing major changes and consolidation, others are part of a remarkable technology-driven expansion phase,” said Darren Alcus, president and CEO of GE Capital, Healthcare Financial Services. “Across all these sectors, we expect to see a high level of ongoing demand for debt financing in 2015.”
HFS supports healthcare companies in three broad areas: corporate finance, real estate finance and venture debt for life sciences companies. Below are details on each segment and examples of noteworthy 2014 transactions.
“Although the leveraged loan market was significantly altered in 2014 by a transformed regulatory environment, we had one of our most active years,” noted Al Aria, senior managing director for GE Capital, Healthcare Financial Services’ corporate finance team.
“We supported our customers in 2014 by deploying nearly $7 billion in commitments despite the choppiness in the leveraged loan and high yield markets. Deals in certain healthcare sectors with appropriate structures experienced very strong demand at historically low yields. Tougher deals with more aggressive structures required higher pricing and changes to their structures,” he added. “We also saw record M&A activity in 2014 — the highest level since 2007 — driven primarily by corporate-to-corporate deals.”
Noteworthy transaction: In May 2014, HFS served as administrative agent on a $207 million senior secured credit facility to finance Harvest Partners’ acquisition of Athletico Physical Therapy, an Oak Brook, IL-based provider of outsourced rehabilitation services with a focus on sports injuries and therapies. In December 2014, HFS served as administrative agent on a $465 million senior secured credit facility to refinance Athletico’s existing debt and to finance the acquisition of Accelerated Rehabilitation Centers, which has a network of more than 300 outpatient rehabilitation centers throughout the Midwest and Arizona.
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