Good morning, PE Hubsters! Rafael Canton here with you for the US edition of the Wire from the New York newsroom.
First, we have an episode of Private Equity Spotlight. In the podcast episode, PE Hub editor-in-chief Mary Kathleen Flynn speaks with Dipanjan ‘DJ’ Deb, co-founder and CEO of Francisco Partners, and Louis Samson, co-president of Platinum Equity, to find out how dealmakers are navigating the current conditions and what they’re foreseeing for 2026. This episode is sponsored by Francisco Partners and Platinum Equity.
Then, there are signs of new life in initial public offerings, and private equity-backed companies are back in the IPO game. The healthcare sector is especially active. PE Hub reporter John R. Fischer spoke with Jefferson Rives from Truist Securities to learn about trends driving IPO activity in healthcare.
We’ll finish with a look at the sixth and last installment of PEI Group’s Private Markets 2030 series. The theme from this week was Artificial Intelligence.
Elusive rebound
Dealmakers had high hopes for 2025, expecting the year to deliver a welcoming environment for M&A. Instead, uncertainty about tariffs and other issues stopped them in their tracks mid-year, and deal volume dropped. Exits have been especially challenging. But now as the year draws to a close, some clarity has returned to the market, and the number of completed transactions is rising once again. Many say the elusive rebound is just around the corner.
In this episode of Private Equity Spotlight, PE Hub editor-in-chief Mary Kathleen Flynn speaks with Dipanjan ‘DJ’ Deb, co-founder and CEO of Francisco Partners, and Louis Samson, co-president of Platinum Equity, to find out how dealmakers are navigating the current conditions for M&A and what they’re foreseeing for 2026.
“The market is really feast or famine, which means some assets are getting sold for huge prices and many other assets aren’t trading,” Deb explained.
“In the near term, it’s possible that we see an environment where most of the key ingredients of a healthier M&A market are present,” Samson said.
Significant uptick
Private equity-backed companies are once again considering initial public offerings, as PEI Group explored in our Private Markets 2030 series earlier in November.
PE Hub reporter John R. Fischer writes that healthcare companies are among the early entrants. For example: in October, Medline filed its intent to go public; Bain Capital’s coronary AI diagnostics company Heartflow, which raised $316.7 million in August; Insight Partners-backed musculoskeletal digital health company Hinge Health, which raised $437 million in May; and MidEuropa-backed medical laboratory services provider Diagnostyka, which raised over €400 million in February.
More IPOs are expected. To learn more about the trends fueling healthcare public debuts, John turned to Jefferson Rives, head of healthcare technology investment banking at Truist Securities.
Here’s a snippet of John’s conversation with Rives.
How has the healthcare IPO market for PE fared in 2025?
There have been a few IPOs in 2025, but I would expect to see more next year. I don’t know if it turns into a significant uptick in IPOs, but I do think both issuers as well as public investors are optimistic. Both are monitoring what the markets are like and the appetite for new equity issuances. We’ve had two or three IPOs over the last 12 to 18 months in healthcare technology; I don’t expect us to go down from here.
More companies are prepped and ready. As you’ve seen from recent companies that went public and did well in the markets, we will see more companies choose that as their exit relative to other exit opportunities.
Why do you expect to see more healthcare IPOs in 2026?
You had the recent IPOs that happened in 2024 and 2025 in the healthcare technology market, and they have been public for multiple quarters, and continued to beat their guidance and consensus expectations and then have raised expectations. Their share prices have traded up, so investors have made money. This combination is a pretty good indicator that the public markets are supporting these stories.
In healthcare technology, a lot of companies that were public have been taken out of M&A – either taken private or combined with another competitor. So, from the IPO buyside investor, my perspective is that there is a supply and demand imbalance. You’ve had a few IPOs that have been successful over the last 12 months in the healthcare technology space, but even more companies have been taken out of the market through M&A.
Then it comes down to a valuation difference. Can you get a higher valuation difference with an IPO versus private markets? I think another thing that will drive IPO activity is if there is a handful or more of very large private healthcare technology companies that could only realistically be bought by larger organizations. Many of them are currently owned by the largest financial sponsors in the world. Unless they’re going to trade to another financial sponsor or a very large strategic, which are limited in number, it just seems like the IPO market is the next logical exit because that’s where they can get the capital.
Which healthcare technology subsectors are attractive for IPOs?
Anything on the right side of lowering costs or raising the quality of healthcare is a key theme. It’s very helpful if the healthcare technology company offers a mission-critical solution to its client base. And what I mean by that is they’re selling software or solutions, and their clients are using it in their day-to-day workflow. That can be caring for patients, collecting revenue, using AI and analytics or anything else for their clients.
Being in the day-to-day workflow and being mission-critical to what their clients do is a pretty key theme. Focusing on key questions, such as do you lower costs in the system? Do you provide better quality to the system or allow doctors to provide better care or allow payers to provide better care? And then is your solution critical to the day-to-day of clients?
The theme that I mentioned previously and still believe is that we’re in an environment where larger companies in the healthcare technology ecosystem are likely to go public versus stay private. When I say larger, I mean companies that have a significant amount of EBITDA and EBITDA margins. And they have scale, meaning revenue or EBITDA in the hundreds of millions to billions of dollars. Those types of companies are the ones that we believe are likely to go public first.
As you see those continue to perform in the public markets, the cohort of public investors who invest in IPOs therefore will be having a deeper and broader appetite for IPOs. It’s kind of a self-fulfilling or virtuous cycle, if you will. If one of those investors makes money, then they’re more willing to invest in other IPOs and make some money in other IPOs. That is a positive sign. The conversations we’re having with our clients are around that.
Keeping up with AI
Let’s look at the sixth and last installment of PEI Group’s Private Markets 2030 series. The theme for this week is Artificial Intelligence. PE Hub Europe editor Craig McGlashan led with a piece about how AI is transforming the entire PE industry.
One section of Craig’s write-up that caught my eye was about how smaller PE firms can keep up on the larger AI front. Here’s a sample:
If AI deployment is so resource intensive, will smaller firms struggle to keep up in the next few years, driving another Private Markets 2030 theme: industry consolidation?
Arguably not. Deep tech investor Jolt Capital may be small compared with some of the other firms in this report, with AUM of €600 million, but it has been at the forefront of AI adoption for some time, launching its proprietary platform Jolt. Ninja in 2016.
“We’ve developed a playbook that is everything that should happen between the investment and the exit,” says CTO Philippe Laval. “We track that with AI to tell us if we are aligned, if we are late, what’s happening, and things like that. Almost 75 percent of our dealflow is generated by this software, Ninja. Most potential targets are in the system, but if not, we put it in the system and track everything through the system.
“That’s another very important thing – it is a single point of truth. Everything is in Ninja.”
Jolt has also built a system called Blaise that resembles ChatGPT.
“We use it more as a critic than as something to push us forward. We prompt Blaise about what could go wrong with this deal and to write a red report, a counter memo. We’d starting by asking for a blue report, on why we should invest, and it was so convincing. We need to critique what comes out.”
Crucially, Jolt trained Blaise on its own data. It had a head start in that area, having focused on collating and cleaning data for many years.
That data differentiator will become even more important in the next few years, says Patrik Bless, co-head of business applications and chief information security officer at Partners Group.
“Good quality proprietary data will differentiate the good GPs from the great GPs.”
That’s it for me. If you have any questions, thoughts, or want to chat about deals in the tech, consumer or sports sectors, please email me at rafael.c@pei.group.
Tomorrow, Craig McGlashan will be filling in for Nina Lindholm for the Europe edition of the Wire, and Michael Schoeck will be writing the US edition of the Wire.
Cheers,
Rafael