NEW YORK — October 8, 2019 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2019 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.
The report analyzes M&A activity for the sector during the first three quarters of 2019 and compares it with data covering 2018. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.
Transaction volume increased eight percent year-to-date compared to the first three quarters of 2018. Aggregate deal value gained 19 percent during this timeframe, from $24.9 billion to $29.7 billion. In terms of valuations, the median revenue and EBITDA multiples remained nearly constant at 2.3x and 12.6x, respectively.
Deal flow in the Healthcare IT segment increased five percent year-to-date over the first three quarters of 2018. The segment’s largest transaction in both the third quarter and thus far in 2019 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, deal volume in the Healthcare Business Services segment improved eight percent year-to-date over the first three quarters of 2018. Notable segment deals in third quarter 2019 included WebMD’s announced acquisition of Aptus Health, a subsidiary of Merck that offers multichannel health engagement solutions to providers and patients; and Arthur J. Gallagher & Co.’s acquisition of BluePeak Advisors, which assists health plans, employers, pharmacy benefit managers, pharmaceutical companies, and other health care alliance companies with Medicare and Medicaid operational and compliance issues.
Meanwhile, notable deals in the behavioral health sector during third quarter 2019 included Golden Gate Capital’s acquisition of Invo Holdings, a provider of autism and childhood behavioral health services; The Stepping Stones Group’s acquisition of New England ABA, a provider of in-home and community-based Applied Behavioral Analysis (ABA) therapy; and Carroll Capital’s acquisition of Easy Speech Pathology, which offers board-certified speech therapy, occupational therapy, physical therapy, applied behavior analysis therapy, and psychological services for both adults and children.
M&A activity in the combined Pharma IT, Business Services, and Information segments decreased 34 percent year-to-date over the first three quarters of 2018, returning to its level during the first three quarters of 2017. Notable related deals in third quarter 2019 included Anju Software’s announced acquisition of OmniComm, a healthcare technology company that provides web-based electronic data capture and eClinical solutions and related value-added services; and Crane Communications’ acquisition of Genomeweb, an online news organization focused on advanced tools in molecular biology research and molecular diagnostics.
A copy of the HEALTHCARE/PHARMA INFORMATION AND TECHNOLOGY INDUSTRY M&A REPORT FOR THIRD QUARTER 2019 is available at the Berkery Noyes website.