NEW YORK — July 8, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its half year 2019 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.
The report analyzes M&A activity during the first half of 2019 and compares it with the four previous six-month periods from 2017 to 2018. This market includes information, technology, digital, and services companies utilized by the pharmaceutical, healthcare payer, and healthcare provider spaces.
Total transaction volume improved 11 percent relative to second half 2018. Aggregate value rose 32 percent, from $14.26 billion to $18.76 billion. The median revenue multiple, after rising from 2.4x in first half 2018 to 2.7x in second half 2018, declined to 2.3x in first half 2019. Deals over the last two-and-a-half years in the $10-$20 million range received a median enterprise value multiple of 1.7x revenue, compared to 3.2x revenue for those in the $20 million and above range.
The Healthcare Business Services segment saw volume remain about constant over the past six months. This followed a 21 percent rise in second half 2018. In terms of value, five of the overall 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. Notable segment deals year-to-date included UnitedHealth Group’s announced acquisition of Equian, a payment processing company used by healthcare payers and insurers, for $3.2 billion; and HealthEquity’s announced acquisition of WageWorks, which administers consumer-directed benefits such as Health Savings Accounts (HSAs), for $1.34 billion.
As for other select industry markets, M&A volume in the Healthcare IT segment increased 14 percent on a half year basis, from 111 to 127 transactions. Meanwhile, the combined Pharma IT, Business Services, and Information segments saw a 39 percent gain in activity, from 33 to 46 transactions. The largest deal in the Pharma related segments during first half 2019 was Dassault Systèmes’ announced acquisition of Medidata, a provider of SaaS-based clinical development software, for $5.82 billion.
Other notable Pharma segment transactions year-to-date included Nordic Capital’s announced acquisition of Aris Global, a drug development platform integrates cognitive computing technologies to automate the core functions of the product lifecycle, for $700 million; and Tabula Rasa Healthcare’s acquisition of Prescribe Wellness, a cloud-based patient relationship management solutions company, for $150 million.
A copy of the HEALTHCARE/PHARMA INFORMATION AND TECHNOLOGY INDUSTRY M&A REPORT FOR HALF YEAR 2019 is available at the Berkery Noyes website.