NEW YORK — October 14, 2015 — Berkery Noyes, an independent mid-market investment bank, today released its third quarter 2015 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 2015 and compares it with data covering 2014. This market includes information, technology, and digital companies servicing the pharmaceutical, healthcare payer, and healthcare provider spaces.

Transaction volume declined six percent over the prior quarter. When compared to the first three quarters of 2014, the number of acquisitions year-to-date rose 13 percent. Meanwhile, total value more than tripled during the last three months, from $1.4 billion to $4.3 billion. This marked a near return to the industry’s first quarter 2015 value level.

The largest transaction in third quarter 2015 and year-to-date was IBM Watson Health’s acquisition of Merge Healthcare, a provider of medical image handling and processing, interoperability and clinical systems, for $1 billion. Moreover, three of the top five and six of the top ten highest value deals so far this year occurred in the third quarter.

Other notable deals during the past three months included Emdeon’s acquisition of Altegra Health, which offers technology-enabled payment solutions for health plans and healthcare providers, for $910 million (note that Emdeon is a portfolio company of Blackstone and Hellman & Friedman); Premier’s acquisition of, a SaaS-based healthcare solutions business that specializes in performance management, pay-for-value reporting and professional education, for $400 million; Cardinal Health’s acquisition of Navihealth, a post-acute care software company that helps physicians manage bundled payments, for $290 million; and Wolters Kluwer Health’s acquisition of Learner’s Digest International, a continuing medical education (CME) provider, for $150 million.

In terms of specific market segments covered in the report, the Healthcare IT segment experienced a 17 percent volume decline over the past quarter. This followed a 43 percent increase in the second quarter, which was the segment’s peak throughout the past seven quarters. In addition, Healthcare IT volume improved 15 percent when compared to the corresponding time period in 2014.

The Medical Education segment more than doubled on a year-over-year basis, from 16 to 35 deals. Healthcare Business Services underwent an 11 percent increase during this period, from 62 to 69 transactions. At the same time the Consumer Health segment saw an uptick, from 22 to 24 deals. As for value, the largest Consumer Health transaction in third quarter 2015 and year-to-date was Adidas’ acquisition of Runtastic, a fitness tracking application, for $239 million.

M&A activity in the combined Pharma IT, Pharma Business Services, and Pharma Information segments decreased slightly throughout this timeframe, from 38 to 35 transactions. Notable Pharma related deals in third quarter 2015 included Inovalon’s acquisition of Avalere Health, a data-driven advisory services company that offers analysis, insight, strategy, and other tools, for $140 million; and Veeva Systems’ acquisition of Zinc Ahead, a provider of content and marketing compliance solutions, for $117 million.

“The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, and shifting responsibilities between payors and providers,” said Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enabled healthcare IT companies that effectively address market niches, which have some level of scale, are in high demand by both financial and strategic buyers.”

“The buyer universe for HIT solution providers has expanded due to the fierce battle underway from all firms along the technology solution curve,” stated Tom O’Connor, Managing Director at Berkery Noyes. “Acquirers are looking for opportunities of scale that increase reimbursement/revenue, ensure compliance and lower costs.” O’Connor continued, “Certain niches such as HIT, Medicare solutions, healthcare compliance solutions, learning solutions and workflow tools are attracting high interest from both strategic and financial buyers. Many of the most interesting companies are software businesses growing rapidly and solving pain points along the health continuum, some due to government regulations.”