1st Half 2019 Healthcare Industry Trends

1ST HALF 2019 KEY HIGHLIGHTS

The largest deal in 1st Half 2019 was Dassault Systèmes’ announced acquisition of Medidata, a provider of SaaS-based clinical development software, for $5.82 billion.

Five of the industry’s top ten largest transactions year-to-date occurred in the Healthcare Business Services segment, making it the best represented sector in the top ten list.

1ST HALF 2019 KEY TRENDS

Total transaction volume in 1st Half 2019 improved by 11 percent over 2nd Half 2018, from 231 to 257.

Total transaction value in 1st Half 2019 increased by 32 percent over 2nd Half 2018, from $14.26 billion to $18.76 billion.

The median revenue multiple, after rising from 2.4x in 1st Half 2018 to 2.7x in 2nd Half 2018, declined to 2.3x in 1st Half 2019. The median EBITDA multiple moved upwards from 12.6x in 2nd Half 2018 to 14.6x in 1st Half 2019.

Both the Pharma IT and Healthcare IT segments saw notable increases in volume during the half year period. Pharma IT volume gained 50 percent, from 16 to 24 deals. Healthcare IT volume rose 14 percent, from 111 to 127 transactions.

M&A MARKET OVERVIEW

Berkery Noyes tracked 1,181 Healthcare/Pharma Information and Technology transactions between 2017 and 1st Half 2019, of which 235 disclosed financial terms, and calculated the aggregate transaction value to be $73.85 billion. Based on known transaction values, we project values of 946 undisclosed transactions to be $9.72 billion, totaling $83.57 billion worth of transactions tracked over the past two and a half years.

Transactions from 1st Half 2017 to 1st Half 2019 with enterprise values in the $10-$20 million range had a median revenue multiple of 1.7x, whereas those above $20 million garnered a median revenue multiple of 3.2x.

Disclosed median enterprise value multiples for all segments combined in this report during the last 30 months were 2.3x revenue and 13.2x EBITDA.