Healthtech Report 2H2019
The first half of 2019 recorded a slight increase in healthtech M&A activity, with a healthy 100 deals inked and around $8.3 billion in disclosed transaction value throughout the period. Trailing 30-month median valuation multiples reached the highest levels in years, with EV/EBITDA climbing to 17.7x after the low of 13.7x in the second half of 2018, and EV/S reaching 3.4x – a new record for healthtech.
More than ever, M&A activity in the healthtech sector has pointed to a desire to deliver better healthcare, cheaper. Acquisitions in the first half of 2019 targeted companies focused on:
- Prevention – combing through and tracking patient data to detect anomalies early, avoiding later-stage, costly emergency treatments;
- Precision – particularly in terms of efficient resource allocation (personnel, equipment and facilities) and accurate payment processing; and
- Patient experience – for North American healthcare providers, hospitals and practices to assess patient satisfaction and use this data to remain relevant in a competitive healthcare environment.
The report is divided into studies of four healthtech sectors: Healthcare Vertical Software; EHR & Information Services; Online Health Services; and Health IT Services & BPO.
- Trends and analysis of deal activity
- Deal geography
- Top acquirers
- Valuation metrics
Sum of Healthtech M&A Deals
In 1H 2019, 38 per cent of acquisitions were made by financial buyers – a proportion consistent with the share seen in previous reporting periods, which have swayed between 29 and 42 per cent. Several of these financial buyers made acquisitions with a preference for medical records and healthcare data management software; clinical management & analysis SaaS; and online health services.
This is best illustrated by three acquisitions carried out by West Coast- and UK-based Francisco Partners and its portfolio companies, as it targeted Qualcomm’s medical data networking systems; Bernoulli Health’s clinical surveillance software; and SRS Health Software’s medical records software.