1st Half 2022 Healthcare Industry Trends

1ST HALF 2022 KEY HIGHLIGHTS

The largest transaction in 1st Half 2022 was R1 RCM’s acquisition of Cloudmed, which specializes in healthcare revenue intelligence solutions that automate the analysis of large volumes of medical records, payment data, and complex insurance models, for $4.09 billion.

Four of the top five highest value deals year-to-date were completed by strategic acquirers.

1ST HALF 2022 KEY TRENDS

Total transaction volume in 1st Half 2022 declined by two percent over 2nd Half 2021, from 246 to 240.

In terms of acquirer type, strategic volume rose five percent on a half year basis, from 164 to 173. Private equity volume decreased 17 percent, from 82 to 68.

Total transaction value in 1st Half 2022 fell by 75 percent over 2nd Half 2021, from $67.54 billion to $16.73 billion. Of note, value more than doubled from 1st Half 2021 to 2nd Half 2021.

The median revenue multiple declined from 4.6x in 2nd Half 2021 to 2.4x in 1st Half 2022.

The segment with the largest rise in volume in 1st Half 2022 over 2nd Half 2021 was Pharma Business Services with a 50 percent gain, from 10 to 15 transactions.

M&A MARKET OVERVIEW

Berkery Noyes tracked 1,332 Healthcare/Pharma Information and Technology transactions between 2020 and 1st Half 2022, of which 290 disclosed financial terms, and calculated the aggregate transaction value to be $142.04 billion. Based on known transaction values, we project values of 1,042 undisclosed transactions to be $19.69 billion, totaling $161.73 billion worth of transactions tracked over the past two and a half years.

Transactions from 1st Half 2020 to 1st Half 2022 with enterprise values in the $10-$40 million range had a median revenue multiple of 3.0x, whereas those above $40 million garnered a median revenue multiple of 4.9x.

Disclosed median enterprise value multiples for all segments combined in this report during the last 30 months were 3.3x revenue and 14.0x EBITDA.