2020-01-09 Berkery Noyes Releases Healthcare/Pharma Information and Technology Industry M&A Report for Full Year 2019

NEW YORK — January 9, 2020 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2019 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry. 

The report analyzes merger and acquisition activity for the industry during 2019 and compares it with data covering 2017 and 2018. This market includes information, technology, digital, and services companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.

Total transaction volume increased 14 percent on a year-to-year basis. Aggregate value declined six percent, from $36.09 billion to $33.90 billion. In terms of valuations, the median revenue multiple shifted from 2.5x to 2.3x, while the median EBITDA multiple moved upward from 11.9x to 12.6x. Over the past three years, deals in the $10-$20 million range received a median enterprise value multiple of 1.7x revenue, compared to 3.1x revenue for those in the $20 million and above range.

M&A volume in the Healthcare Business Services segment gained 17 percent on an annual basis. High profile Healthcare Business Services transactions during 2019 included:

• Leonard Green & Partners’ and Ares Management’s announced acquisition of Press Ganey Associates, which offers patient experience measurement and performance improvement solutions to healthcare providers, with a reported valuation of more than $4 billion;
• UnitedHealth Group’s announced acquisition of Equian, which offers payment-processing services for healthcare companies and insurers, for $3.2 billion;
• Prudential Financial’s acquisition of Assurance IQ, a consumer solutions platform for health and financial wellness needs, for $2.35 billion;
• Centerbridge Capital Partners’ acquisition of GoHealth, a health insurance technology company that provides families and individuals with affordable health insurance, for $1.5 billion; and
• Health Equity’s announced acquisition of WageWorks, which administers Consumer-Directed Benefits such as Health Savings Accounts, for $1.34 billion.

The Healthcare IT segment experienced an 11 percent rise in volume. The largest Healthcare IT deal during the year was private equity firm EQT and Canada Pension Plan Investment Board’s (“CPPIB”) acquisition of a majority stake in Waystar, a revenue cycle management (RCM) provider, for $2.7 billion.

As for other select markets covered in the report, the Pharma IT segment underwent a 32 percent rise in volume, from 31 to 41 deals. The largest Pharma IT transaction in 2019 was Dassault Systèmes’ a provider of SaaS-based clinical development software, for $5.82 billion. Meanwhile, the Medical Education segment gained 13 percent, from 39 to 44 transactions. The Consumer Health segment remained nearly constant at 35 acquisitions.

A copy of the HEALTHCARE/PHARMA INFORMATION AND TECHNOLOGY INDUSTRY M&A REPORT FOR FULL YEAR 2019 is available at the Berkery Noyes website.