GE Capital’s Healthcare Financial Services (HFS) business provided more
than $10.5 billion in financing to customers across more than 240
transactions in 2014, an increase of 20% percent from the prior year.
For the third consecutive year, GE Capital was the No. 1 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.
Corporate Finance
“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.
Real Estate
In 2014, the HFS real estate segment was a leading capital provider to
the healthcare industry, closing more than 110 transactions that
primarily financed real estate in the long-term care / seniors housing
and medical properties sectors.
“Demand for real estate accelerated last year, driven by capitalization
rate compression across all our markets,” said James Seymour, senior
managing director of GE Capital, Healthcare Financial Services’ real
estate financing team. “This positive environment continued to attract
sophisticated capital to healthcare real estate, resulting in higher
property values and record transaction volumes.”
“In 2015, with interest rates so low, we expect ample liquidity to be
available to real estate investors. The prospect of rates beginning to
rise this year may prompt operators to consider additional consolidation
or acquisition financing opportunities,” he noted.
Noteworthy transaction: HFS was administrative agent on a $500
million credit facility for Brookdale Senior Living Inc. The funds may
be used for acquisitions, working capital and capital expenditures as
well as general corporate purposes. Based in Brentwood, TN, Brookdale is
the leading operator of senior living communities throughout the U.S.
Life Sciences
The life sciences segment of HFS realized 25% year-over-year growth in
total venture loan deal volume between 2014 and 2013. The team focuses
on customers in the pharmaceutical, biotechnology, healthcare IT and
medical device sectors with an emphasis on personalized medicine and
molecular diagnosis.
“Last year was a strong one in both the public and private equity
markets,” said Brett Haring, senior managing director of GE Capital,
Healthcare Financial Services, life science finance business. “We
accelerated our growth along with that of our many customers and we plan
to continue to support existing and new customers in 2015.”
Noteworthy transaction: In May, HFS served as administrative
agent on a $25 million credit facility for Assurex Health, a pioneer in
pharmacogenomics based in Mason, OH. Assurex was planning to use the
funds to help develop the emerging personalized neuropsychiatric
medicine market.
About GE Capital, Healthcare Financial Services
GE Capital’s Healthcare Financial Services (HFS) business is one of the
most active capital providers in the U.S. healthcare market. With
in-depth industry knowledge and expertise, the HFS team of professionals
creates financial solutions tailored to meet the individual needs of its
customers. For more information, visit www.gecapital.com/healthcare
or follow company news via Twitter (http://twitter.com/GELendLease).
GE Capital offers consumers and businesses around the globe an array of
financial products and services. For more information, visit www.gecapital.com
or follow company news via Twitter (http://twitter.com/GECapital).
GE (NYSE: GE) works on things that matter. The best people and the best
technologies taking on the toughest challenges. Finding solutions in
energy, health and home, transportation and finance. Building, powering,
moving and curing the world. Not just imagining. Doing. GE works. For
more information, visit the company's website at www.ge.com.
Copyright Business Wire 2015