Looking ahead
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The impact of COVID-19 on key consolidation drivers ensures the trend will endure in the medium to long-term
The enhanced impact of COVID-19 on key consolidation drivers ensures the trend will endure in the medium to long-term. In combination with projections of sustained increases in demand and secured long-term government funding, there is significant latent market opportunity for the acquisition of highly defensible assets.
Consolidation drivers likely to persist in the medium to long-term include:
- Growth in volume and diversity of investors seeking to exploit strong long-term fundamentals of a fragmented market
- Enhanced Care Quality Commission (CQC) oversight, requiring further investment in staff, training, and compliance, with providers needing to demonstrate they are appropriately equipped to deliver requisite service levels
- Long-standing recruitment challenges such as low wages, short-term careers and lack of career structure, and sector dependence on overseas workers, all of which have been exacerbated by the impact of COVID-19
- Technological advancement, with those firms most advanced likely to receive investment and serve as a platform to expand and consolidate as such technology is rolled out further
The above market characteristics and trends underpin the attractiveness of the market to investors and show no sign of abating in the light of COVID-19.
