There's a conversation happening in boardrooms across PE-backed healthcare that nobody's putting on paper.
The pipeline is bigger than it's ever been. The teams running it haven't grown.
From what I've seen across the deals I've worked on and the conversations I'm having now, most corporate development teams at healthcare platforms are evaluating 3-5x the volume of targets they were looking at three years ago. The mandate from the PE holdco is clear: accelerate. Find more. Close faster.
But the team is still 2-3 people. Maybe 4 if you're lucky.
What breaks first
It's not sourcing. Most teams have enough inbound from brokers and enough outbound muscle to fill the top of the funnel.
What breaks is the middle. The operational layer between "this looks interesting" and "we're ready to submit an LOI."
Target screening that actually tells you whether a practice is worth pursuing, not just that it exists. Market sizing that goes beyond TAM estimates from a subscription database. Diligence prep that doesn't require your VP to spend 40 hours per target before even engaging counsel.
This is the layer that collapses under volume. And when it collapses, one of three things happens:
1. Deals slip. You're running diligence on Target A while Targets B and C go cold. The broker calls and says another group signed the LOI while you were still building the comp table.
2. Quality drops. Rushed analysis misses things. The market study gets thinner. The financial model has gaps nobody catches until the IC memo. I've seen deals where the team was so stretched that the diligence package went to committee with assumptions nobody had time to pressure test.
3. People burn out. The senior person on the team starts doing analyst-level work because there's nobody else. The pipeline becomes a function of one person's bandwidth, not the market opportunity.
The hire vs. outsource question
The instinct is to hire. Post for a Manager of Corp Dev. $120-150K loaded. 60-90 days to get someone onboarded who actually knows healthcare transactions.
But here's the math that's hard to ignore: median PE hold periods have stretched to 6+ years. Many healthcare platforms are in year 4, 5, or deeper with no clear exit timeline. Every dollar of SG&A still comes out of EBITDA. A $150K hire is effectively a $1M+ hit to enterprise value at a 7-8x multiple. And when that exit finally comes, it's the equity holders on the platform team who feel it. The people who stayed, ground it out, and helped build the portfolio. Their payout is directly tied to the multiple. Every dollar of unnecessary overhead compresses what their equity is actually worth.
That's the tension. You need the capacity now, but the cost structure matters for the exit and for the people whose equity is on the line.
From what I'm seeing, the teams that are moving fastest are taking a different approach. They're not hiring or waiting. They're outsourcing the research and analysis layer to specialized partners who can deliver the work product without the permanent cost.
What fractional deal operations actually looks like
This isn't advisory. Nobody needs another consultant telling them what they already know.
Fractional deal ops means someone delivers the actual work product your team would produce internally, just faster and without adding to your headcount.
Target screening memos. Market intelligence reports. Comp table builds. Site-level financial analysis. Diligence prep packages. The deliverables your IC committee needs to make a decision.
The speed advantage comes from AI-powered workflows that compress weeks of research into days. But the credibility comes from the person driving it actually having sat in the seat. Understanding what a VP of Corp Dev needs in an IC memo. Knowing which data points matter for a dental roll-up vs. a behavioral health platform vs. an urgent care consolidation.
That's the gap I'm building Healthcare M&AI to fill. Not a tool. Not a database subscription. A fractional deal operations layer that scales with your pipeline without scaling your payroll.
The question to ask your team this week
If your corp dev team is running 4+ active processes right now, ask them: how many hours per deal are going into research and analysis before the LOI goes out? And how many of those hours require actual judgment vs. data gathering?
In my experience, 60-70% of pre-LOI work is structured research that can be compressed or outsourced. The other 30-40%, the relationship work, the negotiation, the judgment calls on whether a target actually fits your platform thesis, that's best kept in-house by the actual acquirer. That's your edge. Don't outsource that.
The platforms that figure out how to separate those two layers are the ones whose equity is actually going to be worth something at exit. Not another roll of the dice where the team carried the weight but the cost structure ate the upside.
I'll be writing more about specific workflows and frameworks for this in upcoming issues.
Learn more about how Healthcare M&AI supports deal teams.
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