NEW YORK — January 20, 2016 — Berkery Noyes, an independent mid-market investment bank, today released its full year 2015 mergers and acquisitions trend report for the Healthcare/Pharma Information and Technology Industry.

The report analyzes merger and acquisition activity for the industry during 2015 and compares it with data covering 2013 and 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.

Total transaction volume increased 15 percent on a year-to-year basis. Aggregate value gained four percent, from $16.44 billion to $17.08 billion. Regarding valuations, the median revenue multiple improved from 2.4x to 2.7x, while the median EBITDA multiple remained nearly constant at 13.8x. As for strategic acquirers, the number of deals rose 24 percent, from 281 to 348.

The most active acquirer in 2015, either directly or through an affiliated business, was eHealth company CompuGroup Medical AG with seven deals. Meanwhile, the most active strategic U.S. based acquirer in 2015 was Roper Technologies with five transactions. Of Roper’s deals, the largest was the announced acquisition of CliniSys Group, a supplier of laboratory information management systems, through Sunquest Information Systems for $261 million.

The industry’s most acquisitive financial sponsor in 2015 was New Mountain Capital with five deals. In terms of value, two of the top ten largest transactions during the year were backed by private equity firms. This included Pamplona Capital Management’s announced acquisition of MedAssets, a healthcare performance improvement company, for $2.77 billion, which was also the industry’s highest value deal in 2015. Pamplona is combining MedAssets’ revenue cycle management (RCM) business with Precyse, a health information management company that it acquired earlier in the year. In addition, Pamplona is divesting MedAssets’ spend and clinical resource management business to VHA-UHC Alliance NewCo. VHA, a national healthcare network, and UHC, an alliance of not-for-profit academic medical centers, were combined in 2015 following a merger.

The other financially sponsored deal that made the top ten list was Emdeon’s acquisition of Altegra Health, which offers technology-enabled payment solutions for health plans and healthcare providers, for $910 million. Emdeon is a portfolio company of Blackstone and Hellman & Friedman.

Deal volume in the Healthcare IT segment improved 21 percent in 2015. The Healthcare IT segment accounted for almost half of the industry’s aggregate volume, and strategic acquirers comprised 82 percent of the Healthcare IT volume.

Notable Healthcare IT transactions in the top ten list included IBM Watson Health’s acquisition of Merge Healthcare Incorporated, a provider of medical image handling and processing, interoperability and clinical systems, for $1.03 billion; and Cardinal Health’s acquisition of Navihealth, a post-acute care software company that helps physicians manage bundled payments, for $290 million.

Other high profile Healthcare IT deals outside the top ten were Computer Programs and Systems’ acquisition of Healthland, a provider of integrated technology solutions to rural community and critical access hospitals, for $250 million; Quality Systems’ acquisition of HealthFusion, a developer of web-based, cloud computing software for physicians, hospitals and medical billing services, for $165 million; and Roper Industries’ acquisition of Strata Decision Technology, a cloud-based financial analytics and performance platform that is used by healthcare providers, for $140 million.

Upon examination of other markets covered in the report, the segment with the largest yearly rise in volume was Medical Education, which more than doubled from 18 to 39 transactions. The Healthcare Business Services segment experienced a 19 percent increase, from 81 to 96 deals. M&A activity in the combined Pharma segments declined 17 percent, from 52 to 43 acquisitions.

“For all the recent talk of increased deal flow, there still remains a lack of high-quality opportunities of scale in the market today,” said Tom O’Connor, Managing Director at Berkery Noyes. “However, once an attractive opportunity of scale comes out there is no lack of buyers at robust prices. The credit environment is still favorable for attractive deals of scale, particularly those where a high percentage of revenue is recurring.” O’Connor added, “Companies of scale with rapid revenue growth are perfect bolt-ons for strategic buyers, and many of the large private equity groups have come down market looking for new platforms to buy and build.”

According to Jonathan Krieger, Managing Director at Berkery Noyes, "Strategics continue to acquire businesses to build out their product portfolio and broaden their customer footprint. Healthcare constituents continue to seek niche software vendors that promote interoperability, structure clinical data, improve outcomes and reduce costs."

A copy of the HEALTHCARE/PHARMA INFORMATION AND TECHNOLOGY INDUSTRY M&A REPORT FOR FULL YEAR 2015 is available at the Berkery Noyes website.