Q3 2019 Healthcare Industry Trends

Q3 2019 Key Highlights

The largest transaction in Q3 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.

Strategic acquirers accounted for two-thirds of the industry’s total volume during the quarter.

Healthcare IT volume represented 44 percent of aggregate deal activity in Q3 2019.

Q3 2019 Key Trends

Total transaction volume in the 1st 3 Quarters of 2019 increased by eight percent over the 1st 3 Quarters of 2018, from 358 to 386.

Total transaction value in the 1st 3 Quarters of 2019 gained 19 percent over the 1st 3 Quarters of 2018, from $24.9 billion to $29.7 billion.

Multiples & Value Trends

The median revenue and EBITDA multiples both remained nearly constant. Through the 1st 3 Quarters of 2019, the median revenue multiple was 2.3x while the median EBITDA multiple was 12.6x.

Top Ten Deals Through Q3 2019

The top ten deals by value have seen four new additions since our half year report. Two of the deals involved the consumer health insurance marketplace: Prudential Financial’s announced acquisition of Assurance IQ for $2.4 billion, plus an additional earnout of up to $1.2 billion in cash and equity; and Centerbridge Capital Partners’ acquisition of GoHealth for $1.5 billion.

These four transactions, with an aggregate value of $7.7 billion, represented 26 percent of transaction value in the 1st 3 Quarters of 2019 and 67 percent of Q3 2019 transaction value.