Among all deals tracked in the healthcare and pharmaceutical information and technology industries, healthcare IT deals counted for about one-half of the industry’s aggregate volume last year, according to a new report from investment bank Berkery Noyes.
Unsurprisingly, for 2018, the largest private equity backed deal was Veritas Capital and Evergreen Coast Capital’s announced acquisition of athenahealth, a provider of network-enabled services for hospital and ambulatory customers, for $5.6 billion.
Other top health IT deals in 2018 also involved Veritas Capital, including: Veritas Capital-backed Verscend’s announced acquisition of Cotiviti, a provider of payment accuracy and analytics driven solutions, for $4.82 billion; and Veritas Capital’s announced acquisition of the value-based care division from GE Healthcare for $1.05 billion.
Across the industry, there were 132 financially sponsored transactions with an aggregate value of $17.18 billion, representing 28 percent of the total volume and 49 percent of the total value, respectively, according to the report. Other key 2018 trends included:
- Total transaction volume in 2018 remained nearly constant over 2017, from 459 to 464. Deal activity also stayed about the same from 2016 to 2017.
- Total transaction value in 2018 increased by 18 percent over 2017, from $29.68 billion to $35.07 billion.
- The segment with the largest rise in volume in 2018 over 2017 was medical education with a 68-percent gain, from 22 to 37 transactions. As for other notable increases, the healthcare IT segment experienced a 19 percent gain, from 199 to 237 transactions.
- Strategic acquirers accounted for 75 percent of healthcare IT volume.
Berkery Noyes tracked nearly 1,400 healthcare/pharma information and technology transactions between 2016 and 2018, of which 297 disclosed financial terms, and calculated the aggregate value to be $85.31 billion.
Based on known transaction values, the firm projects values of 1,081 undisclosed transactions to be $9.56 billion, totaling $94.87 billion worth of transactions tracked over the past three years.
