January 16, 2013 HEALTHCARE IT, LED BY STRATEGIC ACQUIRERS, DOMINATES TRANSACTION VOLUME IN 2012

Berkery Noyes has disclosed its Healthcare/Pharma Information and Technology M&A Report for Full Year 2012.

Total transaction volume increased 21 percent on a yearly basis. At the same time, aggregate transaction value rose five percent, from $11.36 billion in 2011 to $11.96 billion in 2012. The median revenue multiple improved from 1.5x to 2.3x, while the median EBITDA multiple increased from 9.0x to 9.8x. Private equity firms were responsible for four of the industry’s top ten highest value deals during 2012. The most active financial sponsor in the report over the past year was TPG Capital with five transactions. 

The Healthcare IT segment, which saw an 11 percent increase in deal flow in 2012, accounted for 41 percent of the industry’s aggregate transaction volume. The segment had a median revenue multiple of 1.8x and a median EBITDA multiple of 9.6x. Strategic buyers represented 76 percent of the segment’s volume. 

Meanwhile, transaction volume in the industry’s revenue cycle management subsector increased 37 percent from 2011 to 2012. One of the largest related transactions in 2012 was Sutherland Global Services’ announced acquisition of Apollo Health Street for $184 million. 

M&A activity in the Medical Education segment rose 78 percent on a year-to-year basis, making it the segment with the largest volume increase. Regarding transaction volume in some of the industry’s other market segments, there was a 27 percent rise in Healthcare Business Services and a 35 percent improvement in Consumer Health Information between 2011 and 2012.