Berkery Noyes Report: Commercial Mergers in Healthcare Up by Volume in 2019, Down by Transaction Value
A new report from the New York-based Berkery Noyes independent investment banking advisory firm has found an increase in commercial healthcare mergers, with total transaction volume in 2019 increasing by 14 percent over 2018, from 469 to 534, though total transaction value in 2019 declined by six percent over 2018, from $36.09 billion to $33.90 billion.
As the report notes, the median revenue multiple involved in those transactions shifted from 2.5x in 2018 to 2.3x in 2019. The median EBITDA multiple moved upward during this timeframe from 11.9x to 12.6x. Further, the report has found, “The segment with the largest rise in volume in 2019 over 2018 was Pharma IT with a 32 percent gain, from 31 to 41 transactions,” while “The Healthcare IT segment, which saw volume increase 11 percent on a yearly basis, accounted for nearly one-half of the industry’s aggregate volume in 2019.”
As the report notes, “Berkery Noyes tracked 1,462 Healthcare/Pharma Information and Technology transactions between 2017 and 2019, of which 286 disclosed financial terms, and calculated the aggregate value to be $85.71 billion. Based on known transaction values, we project values of 1,176 undisclosed transactions to be $14.86 billion, totaling $100.56 billion worth of transactions tracked over the past three years. Disclosed median enterprise value multiples for all segments combined in this report during the last 36 months were 2.3x revenue and 12.6x EBITDA.”
The report also noted that “The segment with the largest rise in volume in 2019 over 2018 was Pharma IT with a 32 percent gain, from 31 to 41 transactions.” What’s more, “The Healthcare IT segment, which saw volume increase 11 percent on a yearly basis, accounted for nearly one-half of the industry’s aggregate volume in 2019.”
