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Global M&A Co-Head Krishna Veeraraghavan discussed M&A activity across the biotech and AI sectors on the July 8 episode of Bloomberg TV’s “Bloomberg Deals.” After a slower start for healthcare dealmaking in the first half of the year, biotech transactions are now moving at a rapid pace in both the M&A and equity markets, with small and private transactions contributing significantly to deal volume. Krishna points to the rise in dealmaking from mid-cap companies that were previously acquisition targets and are now driving an influx of $1 billion-to-$2 billion deals, creating “a whole new universe of buyers out there… that’s really driving the pace of activity,” he notes. After a period of weaker sentiment, biotech and healthcare have entered a “virtuous cycle,” with global activity, impending patent cliffs and a resurgence in the equity markets renewing investor appetite and M&A activity, rewarding buyers who are putting capital to work in those sectors, Krishna says.
Krishna also expects AI to continue driving deal activity, even as volatility persists in the sector. “I think there is just a genuine concern that if you are not investing in AI, you’re going to be left behind,” he says. “I expect AI to really continue driving a lot of activity in the space… Capital markets are very good for them, and this is a place where I think private equity has a huge place to play in terms of hybrid capital solutions, investing and financing.”
As AI dealmaking evolves, “acqui-hires” are emerging as a key trend. The “people part” has become a key component of AI deals, Krishna says. “These companies are looking not just at the platform they’re buying, but at the talent.”
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