Semi-Annual
Market Review
HEALTH IT & HEALTH INFORMATION SERVICES
JANUARY 2021
www.hgp.com
Copyright© 2021 Healthcare Growth Partners
2
TABLE OF CONTENTS
Health IT Executive Summary
3
Health IT Market Trends
7
Health IT M&A (Including Buyout)
10
Health IT Capital Raises (Non-Buyout)
15
Healthcare Capital Markets
16
Macroeconomics
21
Health IT Headlines
23
About Healthcare Growth Partners
29
HGP Transaction Experience
30
Appendix A – M&A Highlights
33
Appendix B – Buyout Highlights
38
Appendix C – Investment Highlights
43
1
11
10
9
8
7
6
5
4
3
2
12
Copyright© 2021 Healthcare Growth Partners
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HEALTH IT EXECUTIVE SUMMARY
1
The paradox of a raging bull market amidst a raging pandemic is a reality nearly impossible to
reconcile. While Health IT fundamentals are as strong as ever, it feels cavalier to begin our market
discussion without recognizing the toll of this pandemic. After all, we at HGP and readers of our
research choose to be in healthcare because we collectively believe in the industry’s responsibility to
serve the greater good. We know our industry is fraught with moral hazard, and while a few seek to
exploit, most aim to solve. Fueled by low interest rates and stimulus, the pandemic has bolstered the
investment thesis in health informatics, yet we know the gains will never atone for the losses.
-
2mm
4mm
6mm
8mm
10mm
12mm
14mm
16mm
18mm
20mm
6,000
7,000
8,000
9,000
10,000
11,000
12,000
13,000
14,000
31-Dec-19
31-Mar-20
30-Jun-20
30-Sep-20
31-Dec-20
US InfectionsNASDAQ IndexCumulative COVID-19 US Infections
NASDAQ Price Index
NASDAQ PERFORMANCE IN THE CONTEXT OF US CV-19 INFECTIONS
Never has it been more apparent that the market is a forward-looking entity. Not more than a month
into the pandemic, the market signaled that vaccines and stimulus would bring brighter days. While
the rate of Health IT investment held steady through 2020, Health IT M&A spiked to record levels in
Q3 and Q4. All things equal, valuations are higher post-pandemic, and despite surging COVID cases,
Health IT sees more tailwinds than headwinds.
In 2020, global Health IT Investment (excluding buyouts) increased 24.8% to $22.6B meanwhile the
number of transactions declined a minimal 2.7% to 814, reflecting larger investment rounds. Global
Health IT M&A increased 13.3% to 460 transactions with the total amount of transactions spiking
35.7% to $60.5B.
We hesitate to prognosticate 2021 because even the best were proven wrong in 2020. Based on
what we know at this time, vaccine deployment is underway, valuations are at record highs, M&A is
occurring at record levels, the market is awash in liquidity with more stimulus measures to come, the
pandemic underscores the need for digital health, and the incoming political administration is
healthcare friendly. Barring another unforeseen crisis, market signals are positive going into 2021.
A “Healthcare” Crisis Paradox
EXECUTIVE SUMMARY
Copyright© 2021 Healthcare Growth Partners
4
1
MACRO
CATALYST
SUMMARY
FISCAL STIMULUS
The total amount of stimulus, between the $1.8T CARES Act and December’s $900mm
COVID relief bill, is more than 3x the 2009 stimulus package during the financial crisis.
Stimulus will follow in 2021, flooding the market with liquidity.
MONETARY
POLICY
Interest rates are at record lows and the Fed upped its 2021 real GDP forecast to 4.2%
and projects the unemployment rate to fall to 5.0% by the end of 2021. The Fed
balance sheet is at an all-time high.
RISK ON
(BUYERS) &
RISK OFF
(SELLERS)
Risk On: Low interest rates and excess market liquidity are pushing valuations to top
decile levels. Health IT M&A is at an all-time high.
Risk Off: Sellers see tax increases on the horizon and are rattled by volatility, motivating
sale transactions and managing valuation expectations.
Net Impact: A narrowing of the spread between the bid and the ask, resulting in more
transactions.
MACRO RISKS
Inflation: Despite instinct that the flood of liquidity will drive inflation, economists
believe slack in the economy will absorb inflation pressure in the foreseeable future.
Other: US-China relations, punitive tax policies, cyberattacks, and recession are all risks,
but no higher than recent norms.
HEALTHCARE
CATALYST
SUMMARY
“HEALTHCARE”
CRISIS
The pandemic highlighted the shortcomings of our healthcare system, underscoring the
need to invest in virtual care, resource optimization, patient access, drug discovery and
clinical trial optimization, cybersecurity, supply chain, behavioral health, and patient
safety, among many others.
POST-PANDEMIC
VIRTUALIZATION
The world will never return to 2019 behavioral patterns since the pandemic accelerated
the inflection and validated the efficacy of virtual models, especially in the workforce.
POLITICS
With Democratic control, expect a more aggressive healthcare agenda in Washington,
focusing on retrenching the ACA and targeting drug pricing plus additional healthcare
stimulus funding and a likely focus on value-based care models.
HEALTHCARE
RISKS
Pandemic: A resurgence of COVID-19 poses the greatest risk to global growth and
financial markets. However, scientists remain confident that vaccines will provide
protection for near-and medium-term variants.
149
139
154
165
144
196
1H
2H
1H
2H
1H
2H
2018
2019
2020
HEALTH IT US M&A ACTIVITY
Macro and
Healthcare Forces
Converging to
Support Health IT
Thesis
150 - semi-
annual average
EXECUTIVE SUMMARY
Copyright© 2021 Healthcare Growth Partners
5
1
Expanding on the “healthcare” crisis and the post-pandemic world, COVID-19 is certainly a catalyst for
change, accelerating disruption across all facets of the healthcare system.
CV-19 THEME
SYNOPSIS
QUOTABLE
EXPANDING
HEALTH
INSURANCE
The spike in unemployment highlights the
dependency on employer-sponsored
insurance, the need to improve ACA
insurance marketplaces, a potential to
expand Medicaid, and the sensitivity to
coverage of preexisting conditions.
Expect all to be addressed by the
incoming Biden administration with a
focus on value-based care models.
“Over the last three quarters of 2020, an
estimated 3.5 million people will become
uninsured (and not gain coverage through
other sources) due to COVID-19-related
job losses, a situation that could be worse
in states that did not expand Medicaid.”
Source: Health Affairs
SUPPORTING
FINANCIALLY
VULNERABLE
PROVIDERS
Already financially vulnerable, physician
offices underwent a 60% reduction in
patient volumes at the peak of the
pandemic and hospitals project a $323
billion loss, putting further strain on the
healthcare system, according to NEJM.
“Visits to ambulatory providers fell nearly
60 percent by early April. Since then visits
have rebounded, returning in [September]
to prepandemic levels. While visits
overall have returned to levels prior to the
pandemic, they vary by several
factors….visits involving children, certain
specialties, and behavioral health remain
substantially below their baseline.”
Source: The Commonwealth Fund
MITIGATING
RACIAL
DISPARITIES OF
CARE
COVID-19 disproportionately impacted
racial and ethnic minorities, underscoring
shortcomings in the healthcare system to
insure, manage chronic conditions, and
provide access to a historically
underserved population.
“Black and Hispanic/Latino populations
comprise 3.7x and 4.1x COVID-19
hospitalizations, respectively, and 2.8x
COVID-19 deaths compared to white
populations.” Source: CDC
IMPROVING
PATIENT
SAFETY
Whether providing care in non-acute
settings or managing hospital-acquired
infections, COVID-19 reinforced the need
for healthcare providers to focus on all
elements of patient safety.
Patient safety protocols were stressed
during COVID-19. Coordinated risk
identification, analysis and management
encompassing all elements of the clinical
journey are required to mitigate such
future risks. Even prior to COVID-19, “4
out of 10 patients are harmed in primary
and ambulatory care”. Source: WHO
NORMALIZING
TELEHEALTH &
VIRTUAL CARE
MODELS
COVID-19 massively accelerated
telehealth adoption by healthcare
providers, patients, and payers, including
loosening regulations and expanding
reimbursement. Behavioral Health has
seen the largest increase in Telehealth
utilization.
Telehealth visits increased from 0.1% to
14.0% then regressed to near 6.0% of
total visits. “The percentage of all visits
via telemedicine visits is slowly declining
from its April peak. But it continues to be
well above the pre-pandemic baseline.”
Source: The Commonwealth Fund
EXECUTIVE SUMMARY
Copyright© 2021 Healthcare Growth Partners
6
1
CV-19 THEME
SYNOPSIS
QUOTABLE
DECENTRALIZING
THE CARE
SETTING
Expanding on the telehealth thesis,
expanding access to care at the home and
alternative sites, such as pharmacies and
ambulatory surgery centers, can provide
a safer, cost-effective, and high-quality
alternative to traditional care models.
“Nationwide, deaths in long-term care
facilities account for 40% of all COVID-19
deaths.“ Source: Kaiser Family Foundation
(KFF)
DIVERSIFYING
THE SUPPLY
CHAIN
From ventilators, to PPE, to vaccines, to
protocols set by regulators, such as the
CDC, the healthcare supply was upended
during COVID-19.
“There's been a flood of new entrants
making supplies. We probably vetted 500
to 600 new entrants to market and I'd say
less than 5 percent were actually viable,
highlighting the fact that there's really a
limited amount of actual sources out
there that are legitimate.” Source:
Cardinal Health
FLEXING
CLINICAL
RESOURCES
The conundrum of the pandemic is that
the healthcare system incurred huge
losses and layoffs at the same time it
experienced demand far exceeding
capacity.
“Health care employment decreased 9.5%
from February through April 2020”,
meanwhile “65% of physicians indicated
that the COVID-19 pandemic has
increased their feelings of burnout.”
Source: KFF & Medical Economics
ADDRESSING
MENTAL AND
BEHAVIORAL
HEALTH
Stress, isolation, fear, and job loss all
contributed to a worsening state of
affairs for mental health. The long-term
impact of stay-at-home orders and school
closures is yet to be fully understood,
however data suggests that the majority
of the population experienced some
degree of mental illness or substance
abuse disorders. Behavioral health has
seen the most significant increase in
telehealth utilization.
“53% of adults in the United States
reported that their mental health has
been negatively impacted due to worry
and stress over the coronavirus.” Source:
KFF
ADAPTING TO
THE POST-
PANDEMIC
WORKFORCE
It goes unsaid that the adoption of
digitization, on-demand, and virtual
models accelerated during COVID-19,
including many employer-sponsored
healthcare benefits. The question is how
much will stick.
“More than 60 percent of workers in the
US economy cannot work remotely”,
however “at least 16 percent of American
workers will switch from office-based
settings to working at home at least two
days per week after COVID-19 subsides.”
Source: McKinsey & HBS research
7
HEALTH IT MARKET TRENDS
2
HGP keeps close tabs on M&A valuations to see how the market evolves over time. While we can
only draw data from deals with disclosed multiples and therefore must be careful to consider bias in
any conclusions we draw from this data, we can still get a good sense for how the market values
companies within the different subsectors of Health IT. The following table and accompanying box-
and-whisker plot show the distributions of revenue multiples in 13 subsectors of Health IT. The
sectors were sorted according to median revenue multiple from largest to smallest.
We believe it’s important to keep dispersion in mind when assessing valuation data, which is why we
include the 25th percentile, 75th percentile, and standard deviation in our summary statistics. While
measures of central tendency like the median and mean are certainly indicative of how buyers are
valuing assets, the dispersion shows that with higher multiples, we also see higher risk. This becomes
especially apparent when we chart the data using a box-and-whisker plot. Generally speaking, the
sectors with highest median revenue multiple also experience large standard deviations and positive
skew. For instance, while 25% of the observed telemedicine companies received 10.0x revenue or
more in sale transactions during the period, another 25% received less than 4.1x revenue at exit.
Companies in these hot spaces cannot forget that they still need to show strong operating metrics in
order to recognize premium valuation multiples.
It is worth noting that the multiples reported here cover the time period from 2015 through 2020.
COVID-19 has very quickly changed the global economy, which means that these multiples may not
be representative of valuations across Health IT sectors in the future.
Reported
2015 – 2020
Deals with
Disclosed
Revenue
Multiples
Deals with
Disclosed
EBITDA
Multiples
Revenue Multiple
EBITDA
Multiple
25th
%-tile
Median
75th
%-tile
Mean
Std.
Deviation
Median
Life Sciences IT
6
5
2.2x
6.6x
7.6x
5.5x
3.0x
15.2x
Telemed
12
5
4.1x
6.3x
10.0x
7.1x
3.9x
14.0x
Analytics
48
13
2.7x
4.6x
6.9x
6.0x
5.0x
14.7x
Population Health
23
9
3.2x
4.4x
5.9x
4.9x
2.3x
18.0x
Benefits Mgmt
24
19
3.0x
4.1x
6.3x
4.5x
2.1x
16.2x
Infrastructure Tech
16
3
2.1x
3.9x
4.4x
3.7x
2.0x
15.0x
PM/EMR
31
16
2.4x
3.6x
4.7x
3.8x
2.0x
9.5x
Content
14
4
2.4x
3.6x
4.3x
4.2x
2.8x
11.3x
RCM Tech
42
25
2.1x
3.4x
5.0x
3.7x
2.0x
15.0x
Consulting
18
7
1.6x
2.0x
2.7x
2.4x
1.4x
12.0x
RCM Services
15
11
1.4x
1.9x
2.4x
1.9x
0.9x
9.0x
Utilization Mgmt
6
3
0.7x
1.8x
2.7x
1.8x
1.1x
10.9x
Outsourced Services
18
11
1.2x
1.8x
2.7x
2.1x
1.2x
10.0x
Copyright© 2021 Healthcare Growth Partners
HEALTH IT MARKET TRENDS
8
2
The box-and-whisker plot graphically displays the Median, 25th Percentile, 75th Percentile,
Minimum, and Maximum; where points beyond 1.75 times the Inter-Quartile Range are shown as
outliers. The inter-quartile range is represented by the “box” and shows the range between the 75th
Percentile and the 25th Percentile. Visually, the inter-quartile range serves to describe the variability
of the data. Note that point estimates such as the mean or median can often be misleading on their
own, as they do not convey the level of variability which can be very high such as in the Telemedicine,
Population Health, or Benefits Management sectors.
The sectors were sorted according to decreasing median revenue multiple and show a trend of
decreasing IQR as median revenue multiple decreases. Thus, while companies that fall within sectors
further to the right on the graph can expect a lower revenue multiple in a transaction, the transaction
outcome is also more predictable. A company that falls within a sector on the left, however, cannot
have as strong a confidence in their expected outcome. These observations follow a common theme
in investment theory: that with greater potential upside, there is also greater risk and volatility.
While the metrics presented here may be used as a guidepost for expected outcomes, the end result
of any transaction often depends on buyer circumstances as much as on seller or market
fundamentals, and buyer circumstances tend to be extremely unpredictable. It is not uncommon for
the clearing price of a transaction to be significantly higher than the cover bids. This usually occurs
when a buyer has unique circumstances that justify a higher price than the rest of the buyer universe.
Identifying those buyers and appropriately positioning in relation to them is part of the art of running
a successful transaction process.
Copyright© 2021 Healthcare Growth Partners
HEALTH IT MARKET TRENDS
9
2
Sector
Description
Representative Deals
Life Sciences IT (6 deals)
Median: 6.6x
Std. Dev.: 3.0x
Includes traditional CTMS vendors as
well as other vendors that deliver
value in the drug/device process.
Medidata (Dassault Systemes), Bracket
Global (Genstar Capital), Phlexglobal
(Vitruvian Partners)
Telemed (12 deals)
Median: 6.3x
Std. Dev.: 3.9x
Contains a mix of pure telehealth
tech, telehealth services, and virtual
care models.
AbleTo (United Health), Stratus Video
(AMN Healthcare), PillPack (Amazon),
Best Doctors (Teladoc)
Population Health (48 deals)
Median: 4.6x
Std. Dev.: 5.0x
Comprised of patient engagement,
provider connectivity, and care
management technologies.
BioTelemetry (Philips), Propeller Health
(ResMed), Emmi (Wolters Kluwer), Press
Ganey (EQT), Wellcentive (Philips)
Analytics (23 deals)
Median: 4.4x
Std. Dev.: 2.3x
Primarily represents a mix of life
sciences and provider analytics, and
to a lesser extent, payer analytics.
EPSi (Roper), Central Logic (Rubicon
Venture Partners), Truven (IBM), IMS
(Quintiles)
RCM Tech (24 deals)
Median: 4.1x
Std. Dev.: 2.1x
Includes tech-oriented RCM vendors
serving hospitals and physicians, and
to a lesser extent, payers.
HMS Holdings (Gainwell), eRx Network
(Change Healthcare), InstaMed
(JPMorgan), ABILITY (Inovalon)
Benefits Management (16 deals)
Median: 3.9x
Std. Dev.: 2.0x
Includes benefits management and
admin software companies serving
payers and employers.
OneDigital (Onex Partners), Connecture
(Francisco Partners), HealthX (JMI),
Benaissance (WEX), bswift (Aetna)
Infrastructure Tech (31 deals)
Median: 3.6x
Std. Dev.: 2.0x
Compliance and resource
management software generally
serving provider organizations.
Symplr (Clearlake), Datix (Rothschild),
Morrisey (HealthStream), CenTrak
(Halma), VendorMate (GHX)
Content (14 deals)
Median: 3.6x
Std. Dev.: 2.8x
Transactions are a mix of online
consumer content and provider-
oriented clinical content.
WebMD (Internet Brands), Quantum
Health (Great Hill Partners), Everyday
Health (j2 Global)
PM/EMR (42 deals)
Median: 3.6x
Std. Dev.: 2.0x
Includes ambulatory, acute, post-
acute, alternate site, and
departmental EMR/PM systems.
HST Pathways (Bain Capital), Intelerad
(HGCapital), athenahealth (Veritas),
Kinnser (Mediware)
Consulting (18 deals)
Median: 2.0x
Std. Dev.: 1.4x
Project-based IT consulting and staff
augmentation companies generally
serving provider organizations.
Kinapse (Syneos), Advisory Board
(UnitedHealth), HCI Group (Tech
Mahindra), CynergisTek (Auxilio)
RCM Services (15 deals)
Median: 1.9x
Std. Dev.: 0.9x
Outsourced revenue cycle
management services generally
serving hospitals and physicians.
MedPartners (AMN), Intermedix (R1),
Anthelio (Atos), Cardon (MedData),
Equian (New Mountain)
Utilization Mgmt (6 deals)
Median: 1.8x
Std. Dev.: 1.1x
Payer-oriented software and services
vendors focused on traditional
utilization management.
New Century (Evolent), HealthHelp
(WNS), Alere (Abbott), HSM & CDMI
(Magellan)
Outsourced Services (18 deals)
Median: 1.8x
Std. Dev.: 1.2x
Includes non-RCM outsourced
services primarily serving payers as
well as providers.
Sedgwick & MedRisk (Carlyle Group),
InVentiv (INC Research) Patriot National
(Ebix), HealthPlan Holdings (Wipro)
The following table provides additional context on the valuation trends within each sector as well as a
sample of recent transactions within each.
Copyright© 2021 Healthcare Growth Partners
10
HEALTH IT M&A (INCLUDING BUYOUT)
3
HGP has observed a number of tangible and intangible company and transaction characteristics that
typically define where a deal falls on the valuation distribution. Growth, profitability, and recurring
revenue are the most commonly identified factors used to justify valuation multiples. Not all health
IT companies capture premium valuations just because they operate in health IT. However, those
companies that offer a combination of growth, address an unmet need, and fit into the vision of
healthcare reform are seeing valuations significantly higher than historical patterns of activity.
Premium value is also created when a seller fulfills the specific needs of a buyer at a specific point in
time. Timing and serendipity are external factors that play a large and sometimes unpredictable role
in the creation of value.
HEALTH IT REVENUE MULTIPLES DISTRIBUTION 2015-2020
Copyright© 2021 Healthcare Growth Partners
0%
10%
20%
30%
40%
50%
0-1X
1-2X
2-3X
3-5X
5-7X
7-10X
>10X
Software
Services
BEST
GOOD
PASSABLE
AVOID
Recurring
Revenue
Monthly
Subscription or
Monthly Transaction
Annual Subscription
or Prepaid
Transactional
1-Year+ Prepaid
Subscription
Perpetual License +
Maintenance
Revenue
Metric
Contracted Annual
Recurring Revenue
Annual Recurring
Revenue
Trailing Twelve
Month
Sum of Parts
Revenue Multiples
Revenue
Growth
35%+
20-35%
10-20%
<10%
Gross
Margin
80%+
70-80%
60-70%
GM <70% for SaaS
Lower for Services
Revenue
Retention
95%+
90-95%
Depends on
Customer Type
<90%
Customer
Concentration
<10%
10-20%
20-30%
1 customer > 30% or
a handful of >50%
Profitability
20%+
0-20%
Small Losses
Large Losses
HGP’S TARGET METRICS FOR EMERGING GROWTH HIT SOFTWARE COMPANIES
HEALTH IT M&A (INCLUDING BUYOUT)
11
3
The M&A activity in 2020 is striking in the context of the COVID-19 driven economic recession in
2020. As of HGP’s July 2020 Market Review, we were expecting to end the year with at least 8%
fewer deals compared to 2019. Instead, we saw an acceleration of M&A in the 2H to yield the most
active year for HIT M&A in over a decade. Compared to 405 transactions in 2019, 2020 saw 460 total
transactions. In terms of aggregate deal dollar value, HGP observed $60.5 billion of total transaction
value so far in 2020, a significant increase compared to the already healthy $44.6 billion of
transaction value observed in 2019. The Health IT M&A market has clearly thrived this year despite
the disruptive impact of COVID-19.
Copyright© 2021 Healthcare Growth Partners
$14,074
$53,864
$28,931
$37,226
$42,437
$58,600
$1,084
$905
$771
$1,090
$2,177
$1,925
285
294
300
288
319
340
51
77
70
76
87
120
0
50
100
150
200
250
300
350
400
2015
2016
2017
2018
2019
2020
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
$65,000
Deal VolumeDeal Value ($mm)Deal Value - US
Deal Value - Non-US
Deal Volume - US
Deal Volume - Non-US
HIT M&A DEALS BY QUARTER
90
68
93
85
100
86
102
83
96
89
91
94
82
105
97
80
102
90
97
117
110
86
130 134
0
20
40
60
80
100
120
140
160
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2015
2016
2017
2018
2019
2020
HIT M&A ACTIVITY FROM 2015 THROUGH 2020
HEALTH IT M&A (INCLUDING BUYOUT)
12
3
HIT Software Companies
HIT Services Companies
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
All
Transactions
# of Transactions
184
79
189
54
31
56
Median
4.0x
14.5x
$ 140.00
2.0x
9.6x
$ 167.36
Mean
4.7x
15.3x
$ 500.02
2.1x
10.9x
$ 711.62
<$30mm
Transactions
# of Transactions
47
10
44
11
7
11
Median
3.1x
9.8x
$ 10.21
1.6x
9.0x
$ 15.90
Mean
4.1x
10.9x
$ 12.36
1.6x
8.9x
$ 14.78
$30-100mm
Transactions
# of Transactions
34
16
34
15
8
15
Median
3.2x
11.6x
$ 50.15
1.5x
8.5x
$ 45.00
Mean
4.4x
12.4x
$ 54.82
1.7x
8.1x
$ 49.01
$100-500mm
Transactions
# of Transactions
66
26
69
18
10
18
Median
4.3x
14.5x
$ 195.00
2.0x
11.0x
$ 287.50
Mean
4.9x
16.9x
$ 229.27
2.4x
11.4x
$ 306.10
$500mm-$1B
Transactions
# of Transactions
18
11
21
3
0
3
Median
5.5x
16.2x
$ 700.00
2.7x
NA
$ 690.00
Mean
5.6x
17.5x
$ 690.03
3.2x
NA
$ 680.00
>$1B
Transactions
# of Transactions
19
16
21
7
6
9
Median
5.0x
16.6x
$ 2,010.00
2.4x
14.9x
$ 3,200.00
Mean
5.4x
17.0x
$ 2,942.17
2.6x
16.0x
$ 3,489.21
Copyright© 2021 Healthcare Growth Partners
Getting more granular into valuation multiples, it is useful to note that multiples are often somewhat
correlated to a target’s enterprise value.
For instance, HIT Software valuations experience an
inflection above $30mm in value, which steadily climbs until approximately the $1B valuation mark.
HIT Services multiples experience a similar inflection at $100mm, especially in higher decile
transactions. The inflection points are in part due to a private equity universe that has expanded
leverage capacity for larger transactions, which in turn drives up valuation multiples as the enterprise
value increases.
HEALTH IT M&A (INCLUDING BUYOUT)
13
3
The above tables clearly demonstrate the valuation inflection points of increasing scale. The growth
scalability inflection for Software businesses at enterprise values of around $30mm results in median
revenue multiples increasing from 2.9x to 3.7x in the 2015-2020 data. As those similar software
businesses increase to over $500mm and reach mature scalability, revenue multiples further increase
to a median of nearly 5.0x.
The Services business data also exhibits a valuation inflection with size; however, the growth
scalability inflection point occurs at a larger value closer to $100mm, and mature scalability occurs
nearer to $1bn. The result is Services business revenue multiples increasing from a median of 1.5x
for growth-stage businesses to greater than 2.5x for mature businesses.
2015-2020 HIT Software Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
6.6x
9.2x
8.6x
8.2x
9.3x
75th Percentile
4.5x
5.4x
6.3x
7.1x
7.4x
50th Percentile
2.9x
3.7x
4.3x
4.9x
5.0x
25th Percentile
2.0x
2.7x
2.9x
3.8x
4.2x
2015-2020 HIT Services Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
2.7x
2.8x
5.4x
nm
nm
75th Percentile
2.1x
2.3x
2.9x
nm
3.2x
50th Percentile
1.7x
1.5x
2.1x
2.7x
2.4x
25th Percentile
1.2x
0.9x
1.6x
nm
2.2x
Copyright© 2021 Healthcare Growth Partners
Generally, companies have three valuation inflection points: proof-of-concept, growth scalability, and
mature scalability.
1. Proof-of-concept is value created when a company shows that its product can be successfully
sold and deployed in a commercial setting.
2. Growth scalability occurs when an earlier stage company begins to show profitability or at least
scale at high levels of growth, although the organization is still small and lean.
3. Mature scalability takes place after a company has matured to a level where it takes on real
corporate and organizational infrastructure and the company begins to show strong profitability.
HEALTH IT M&A (INCLUDING BUYOUT)
14
3
Please note that transaction multiples are based on trailing twelve-month financial information,
assume the achievement of all contingent consideration, such as earnouts, and most EBITDA
multiples do not include any adjustments for unusual items. It is also important to note that less than
one-third of transactions contain a disclosed multiple, therefore the multiple data presented
represents only a portion of the overall transaction activity and may include sampling bias.
The median revenue multiple seen in 2020 was 4.5x for HIT Software, between the 4.2x observed in
2019 and the 5.0x high water mark observed in 2018. Overall, interest in Health IT Software was
strong in 2020 as COVID-19 drove accelerated digitization. Conversely, Health IT Services businesses
saw a slight depression in valuations.
MEDIAN M&A MULTIPLES 2015 THROUGH 2020
Copyright© 2021 Healthcare Growth Partners
Detailed multiples trends can be found in the following bar charts. It should be noted that valuation
multiple trends can be very volatile given the limited availability of data. Refer to Appendices A and B
for a list of notable M&A and Buyout transactions in 2020.
3.8X
3.9X
3.4X
5.0X
4.2X
4.5X
14.0X
14.0X
14.0X
15.6X
14.8X
17.3X
0.0X
5.0X
10.0X
15.0X
20.0X
2015
2016
2017
2018
2019
2020
Health IT SoftwareRevenue
EBITDA
2.0X
1.8X
1.9X
2.4X
2.0X
1.4X
9.0X
10.0X
9.6X
10.2X
10.8X
9.3X
0.0X
5.0X
10.0X
15.0X
2015
2016
2017
2018
2019
2020
Health IT ServicesRevenue
EBITDA
15
HEALTH IT CAPITAL RAISES (NON-BUYOUT)
4
The chart below summarizes quarterly private-equity and venture capital activity in Health IT and
related services since 2015 according to the Healthcare Growth Partners database. The data below
and in this section do not include buyout private equity activity. In 2020, Healthcare Growth Partners
monitored 814 capital raise transactions amounting to $22.6 billion in value, a 25% increase in total
invested capital compared to 2019.
HIT INVESTMENT ACTIVITY FROM 2015 THROUGH 2020
HIT INVESTMENT DEALS BY QUARTER
Refer to Appendix C for a list of notable non-buyout capital raises in 2020.
Copyright© 2021 Healthcare Growth Partners
88
122
101
115 106 97
135
155
128
190 189
154
204
237
199
156
181
240
211 203 196 195
218
204
0
50
100
150
200
250
300
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2015
2016
2017
2018
2019
2020
$6,173
$5,724
$7,584
$10,800
$11,363
$15,983
$996
$2,370
$3,171
$5,755
$6,723
$6,582
362
361
414
547
573
513
66
133
252
254
264
301
0
100
200
300
400
500
600
700
2015
2016
2017
2018
2019
2020
$-
$5,000
$10,000
$15,000
$20,000
$25,000
Deal VolumeDeal Value ($mm)Deal Value - US
Deal Value - Non-US
Deal Volume - US
Deal Volume - Non-US
16
HEALTHCARE CAPITAL MARKETS
5
HGP tracks a basket of stock indices within health IT and closely related sectors. It is important to
consider sectors outside of pure “HIT” because the universe of health IT and related services
encompasses many companies that share similar characteristics to other healthcare sectors. What
classifies a company in the universe of health IT and related services, and ideally creates a valuation
premium, is a strong information technology and data component that creates scalability and
competitive strength. This is particularly relevant to services organizations that use technology and
data analytics to streamline their operations. With this in mind, HGP considered six sectors when
evaluating the performance of publicly traded companies – details of the components of these
sectors can be found on page 20.
All 6 indices felt the effects of COVID-19 and plunged alongside the S&P 500 in the first quarter of
2020. However, the remarkable recovery seen in Q2 continued through the second half of 2020 as
markets continued to rally despite a struggling economy. As the year progressed, the unsettling
contrast between the prospering markets and the hardships faced across America became even more
striking as deaths continued to tick upwards while the market continued its stunning upward
trajectory. Notably, the Health IT Index had a phenomenal year, up 62.4%, while HIT & Payer Services
and PBM continued to underperform as compared to the S&P 500. The chart and the table on the
following page summarize the performance of the HGP Indices in 2020.
HIT & RELATED INDEX PERFORMANCE 2020
Jan 21 – First case of coronavirus in
the U.S reported
March 27 – CARES Act was signed into
law in response to CV-19
Nov. 7 – Biden defeats Trump in
Presidential Election
Dec. 11 – FDA issues emergency use
authorization for 1st COVID vaccine
2020 Index Performance
S&P 500
15.5%
HIT
62.4%
Healthcare Services
23.9%
NASDAQ
43.4%
Payers
14.0%
HIT & Payer Services
-1.6%
CRO
24.5%
PBM
-12.7%
April 19 – CMS recommends opening
HC systems with low CV-19 incidence
May 4 – Trump pushes to reopen as
virus toll begins to double
Copyright© 2021 Healthcare Growth Partners
-60%
-40%
-20%
0%
20%
40%
60%
80%
12/31/19
3/31/20
6/30/20
9/30/20
12/31/20
CRO
Health IT
Payers
PBM
Healthcare Services
HIT & Payer Services
S&P 500
HEALTHCARE CAPITAL MARKETS
17
5
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Allscripts
47.1%
2.1X
13.1X
Livongo
457.7%
NA
NA
Accolade
13.0%
13.6X
NMF
Model N
1.7%
6.8X
NMF
Amwell
40.7%
18.5X
NMF
MultiPlan
-18.6%
5.3X
6.7X
Benefitfocus
-34.0%
2.2X
14.6X
NantHealth
213.6%
7.0X
NA
Care.com
-0.2%
NA
NA
NextGen Healthcare
13.5%
2.2X
11.8X
Castlight Health
-2.3%
1.3X
NMF
NRC Health
-35.2%
NA
NA
Cerner
6.9%
4.3X
13.3X
Oak Street Health
191.2%
11.3X
NMF
Certara
46.6%
20.4X
NMF
Omnicell
46.9%
4.8X
23.9X
Change Healthcare
13.8%
3.4X
11.7X
One Medical
211.8%
11.6X
NMF
CPSI
1.7%
1.7X
9.1X
Peloton
434.2%
11.0X
NMF
ehealth
-26.5%
2.0X
8.2X
Phreesia
103.7%
14.8X
NMF
Evolent Health
77.1%
1.5X
NMF
Premier
-7.3%
3.4X
10.7X
Fitbit
3.5%
1.1X
NMF
Progyny
54.4%
6.6X
NMF
GoHealth
-35.0%
4.6X
13.7X
Roper Technologies
21.7%
8.7X
23.9X
GoodRx
22.2%
21.0X
NMF
Simulations Plus
147.4%
26.1X
NMF
Health Catalyst
25.4%
7.8X
NMF
SmileDirectClub
36.6%
5.4X
NMF
HealthEquity
-5.9%
8.4X
26.0X
Specialists On Call
-16.4%
8.1X
NMF
HealthStream
-19.7%
2.5X
14.7X
Streamline Health
12.2%
4.4X
NMF
HMS Holdings
24.2%
4.4X
NA
Tabula Rasa
-12.0%
3.6X
NMF
Inovalon Holdings
-3.5%
4.9X
13.7X
Teladoc Health
138.8%
14.7X
NMF
Invitae
159.2%
14.3X
NMF
Veeva Systems
93.6%
27.4X
NMF
IQVIA
16.0%
3.7X
16.7X
Vocera
100.0%
5.8X
NMF
iRhythm Technologies
248.4%
19.0X
NMF
Multiples based off 2021E Revenue and EBITDA
HIT INDEX PERFORMANCE DETAIL – AS OF DECEMBER 31, 2020
Copyright© 2021 Healthcare Growth Partners
Revenue Multiples
EBITDA Multiples
Sector
2020E
2021E
2020E
2021E
Health IT
6.4x
5.6x
12.8x
13.5x
CRO
3.6x
3.2x
19.2x
16.4x
Payers
0.7x
0.7x
10.8x
10.6x
PBM
0.5x
0.5x
11.2x
11.0x
Healthcare Services
1.7x
1.8x
8.4x
8.5x
HIT & Payer
Services
1.4x
1.3x
10.3x
12.3x
INDEX VALUATION
MULTIPLES
Despite a tumultuous 2020,
valuation multiples have increased
across all sectors as compared to 1H
2020. Notably, HIT continues to
receive the most significant
valuation premiums.
HEALTHCARE CAPITAL MARKETS
18
5
2020 saw an astonishing boom in special purpose acquisition company (SPAC) transactions, with a
record-breaking 248 companies opting for this non-traditional route to hit the public markets, more
than 4 times 2019’s total. An increase in market volatility and uncertainty fueled by the
unprecedented COVID-19 pandemic created a market ripe for SPACs. The enticing promise of greater
market certainty and speed in hitting the markets has driven a SPAC craze as more and more
companies sidestep the traditional IPO route.
Health IT felt this momentum as well, with 7 out of 11 Health IT go-public transactions in 2H 2020
choosing this newly reemerged option (MultiPlan, SOC Telemed, Accountable Healthcare America,
Clover Health, Augmedix, and Cloudbreak Health/ UpHealth). For HIT companies hoping to capitalize
on favorable market dynamic, such as the rise in virtual care, the SPAC route has been highly
attractive as it offers a streamlined and efficient approach to hitting the market.
HEALTH IT IPOS AND SPACS
Copyright© 2021 Healthcare Growth Partners
2H 2020 IPOs and SPACs Include:
• Primary care startup, Oak Street Health, raised $328 million in its IPO on August 6, selling 15.6
million shares at $21/ share. Oak Street’s model includes striking value-based care agreements to
care for Medicare patients and has proved successful in a time when many clinics are struggling
with the drop in in-person visits. The Company ended the year 191% up from its IPO date.
• MultiPlan, provider of data analytics cost management solutions for payers, became the first HIT
company in 2020 to announce its plans to go public via a reverse merger with SPAC Churchill
Capital on July 10. The business combination, valued at $11 billion, closed on October 8 and is the
largest US SPAC deal. However, the company had a tumultuous debut, ending the year down 19%.
•
Joining MultiPlan in the SPAC trend, SOC Telemed announced plans to go public via a reverse
merger with Healthcare Merger Corp. on July 29. The merger closed on October 30th and valued
the Company at an estimated $720mm. Despite the surge in telemedicine due to CV-19, shares for
SOC Telemed ended the year down 16%.
$3.5mm
$10.0mm
$10.8mm
$13.6mm
$83.0mm
13
34
46
59
248
0
50
100
150
200
250
300
$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2016
2017
2018
2019
2020
Gross Proceeds
SPAC IPO Count
SPAC PROCEEDS AND IPO COUNT
HEALTHCARE CAPITAL MARKETS
19
5
• Prescription drug online marketplace, GoodRx, raised $1.1 billion in its September 23 IPO, pricing
the deal well above the expected range. Fueled by the increasing trend in virtual consultations and
online purchases, GoodRx shares jumped 40% on their first day and ended the year up 22%.
• Hims, telemedicine and digital pharmacy platform, filed to go public via a reverse merger with
Oaktree Acquisition on July 29 valuing the company at approximately $1.6 billion. Hims continues
to experience rapid success amidst the lockdown and quarantine measures and reported 91%
year-over-year growth for Q3 2020.
• Accountable Healthcare America announced it entered into a definitive agreement to combine
with SPAC GreenVision Acquisition Corp on August 27 in a deal valuing the company at $150
million, 6.6X AHA’s projected 2021 EBITDA. AHA is technology-enabled population health
company that owns and manages Medicare-focused, risk-bearing provider networks.
• Clover Health, an insurtech company for Medicare Advantage plans, announced plans to go public
through a reverse merger with SPAC Social Capital on October 6, valuing Clover at $3.7 billion. The
deal, led by former Facebook executive Chamath Palihapitiya is Social Capital’s 4th SPAC.
• Google Glass-powered medical scribe service, Augmedix, went public via a reverse merger with
Malo Holdings and began trading on OTCQB on October 5.
• Drug development services firm, Certara, sold 29.1 million shares at $23/ share on December 11,
raising approximately $670 million in its IPO. The IPO valued the company at $3.5 billion, which
reported revenue of $178.9 million for the nine months ended September 2020 and profit of $5.1
million. Shares soared 72% on day 1 of trading and ended the year 47% up from their debut.
• Hoping to capitalize on the telemedicine surge, UpHealth and Cloudbreak announced plans to
merge with SPAC Gig2Capital on November 23 in a business combination valued at $1.35 billion.
The deal combines UpHealth’s integrated care management and digital pharmacy expertise with
Cloudbreak’s telemedicine and video medical interpretation solutions to create a global digital
healthcare company serving an entire spectrum of needs.
• Following a $140 million funding round, health insurance startup Oscar, filed for an IPO on
December 21. Oscar has not yet announced details for its IPO, but investors are eyeing insurtech
peer Lemonade as an indication of Oscar’s potential as the company promises to make health
insurance more digital and accessible.
HEALTH IT IPOS AND SPACS
Copyright© 2021 Healthcare Growth Partners
HEALTHCARE CAPITAL MARKETS
20
5
As discussed previously, HGP tracks six indices across the health IT and services sectors. The
components of each index are listed below. Each index is based on an equal-weighted portfolio.
Sector Components
Health IT (HIT) – Constituents
Allscripts – NAS:MDRX
Accolade – NAS:ACCD
Amwell – NYS:AMWL
Benefitfocus – NAS:BNFT
Care.com – NYS:CRCM [Acquired 2/11/2020]
Castlight Health – NYS:CSLT
Cerner – NAS:CERN
Certara – NAS:CERT
Change Healthcare – NAS:CHNG
Computer Programs & Systems – NAS:CPSI
ehealth – NAS:EHTH
Evolent Health – NYS:EVH
Fitbit – NYS:FIT
GoHealth – NAS:HCAT
GoodRx – NAS:GDRX
Health Catalyst – NAS:HCAT
HealthEquity – NAS:HQY
HealthStream – NAS:HSTM
Hms Holdings – NAS:HMSY
Inovalon Holdings – NAS:INOV
Invitae – NYS:NVTA
IQVIA – NYS:IQV
iRhythm Technologies – NAS:IRTC
Livongo – NAS:LVGO [Acquired 11/4/2020]
Model N – NYS:MODN
MultiPlan – NYS:MPLN
NantHealth – NAS:NH
NextGen – NAS:NXGN
NRC Health – NAS:NRC
Oak Street Health – NYS:OSH
Omnicell – NAS:OMCL
One Medical – NAS:ONEM
Peloton – NAS:PTON
Phreesia – NYS:PHR
Premier – NAS:PINC
Progyny – NAS:PGNY
Roper Technologies – NYS:ROP
Simulations Plus – NAS:SLP
SmileDirectClub – NAS:SDC
Specialists on Call – NAS:TLMD
Streamline Health Solutions – NAS:STRM
Tabula Rasa Healthcare – NAS:TRHC
Teladoc – NYS:TDOC
Veeva Systems – NYS:VEEV
Vocera Communications – NYS:VCRA
PBMs – Constituents
CVS Health – NYS:CVS
Rite Aid – NYS:RAD
Walgreens Boots Alliance – NAS:WBA
HIT & Payer Services – Constituents
Accenture – NYS:ACN
CACI International – NYS:CACI
CBIZ – NYS:CBZ
Conduent – NYS:CNDT
Corvel – NAS:CRVL
DXC Technology – NYS:DXC
Huron Consulting Group – NAS:HURN
Kforce – NAS:KFRC
Magellan Health – NAS:MGLN
Tivity Health – NAS:TVTY
Healthcare Services – Constituents
Amedisys – NAS:AMED
Brookdale Senior Living – NYS:BKD
Community Health Systems – NYS:CYH
Encompass Health Corp – NYS:EHC
HCA Management Services – NYS:HCA
Laboratory Corporation of America Holdings – NYS:LH
Mednax – NYS:MD
Quest Diagnostics – NYS:DGX
Select Medical Holdings – NYS:SEM
Tenet Healthcare – NYS:THC
Universal Health Services – NYS:UHS
CROs – Constituents
Charles River Laboratories International – NYS:CRL
Icon – NAS:ICLR
IQVIA – NYS:IQV
Pharmaceutical Product Development – NAS:PPD
PRA Health Sciences – NAS:PRAH
Schrodinger – NAS:SDGR
Syneos Health – NAS:SYNH
Payers – Constituents
Anthem – NYS:ANTM
Centene – NYS:CNC
Cigna – NYS:CI
Humana – NYS:HUM
Molina Healthcare – NYS:MOH
UnitedHealth Group – NYS:UNH
WellCare – NYS:WCG [Acquired 1/23/2020]
Copyright© 2021 Healthcare Growth Partners
21
MACROECONOMICS
6
2020 was a rollercoaster year few will forget. During the second half of the year, while COVID-19
continued to wreak havoc around the world, the United States conducted one of the most tense
elections for U.S. President in history. In addition to COVID-19, debated topics during the election cycle
included the confirmation of Amy Coney Barrett to fill Ruth Bader Ginsburg’s seat in the U.S. Supreme
Court as well as the Black Lives Matter movement. Ultimately, former Vice President Joe Biden and
incumbent U.S. Senator Kamala Harris won the election with more than 81 million votes, the most votes
ever cast for a U.S. Presidential ticket.
While the election took over news networks and international attention, the stock market regained
momentum and ended the year in another bull market, again reaching all-time highs. The S&P 500
ended the year up over 15%, and the NASDAQ up an impressive 43.2%, bolstered by technology stocks
benefiting from the new work-from-home world and interest rates at their lowest level in decades.
Similar to the uplift experienced in both the stock market and in the M&A market, IPO activity surged in
the second half of the year as low interest rates, federal stimulus, and high valuations combined to
create a favorable environment for raising equity. In 2020, there were 494 IPOs raising an aggregate
$174 billion – more than double that of 2019. Special Purpose Acquisition Companies (SPACs) were a
favorite this year, providing a faster and less volatile means for an operating company to become
publicly listed. On the other hand, only two companies opted to eschew the traditional IPO process and
go public via a direct listing this year, likely a result of risk-aversion to direct listing in 2020’s volatile
market.
Copyright© 2021 Healthcare Growth Partners
2020 US STOCK MARKET PERFORMANCE
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
12/31/2019
3/31/2020
6/30/2020
9/30/2020
12/31/2020
DJIA
S&P 500
Nasdaq
MACROECONOMICS
22
6
Copyright© 2021 Healthcare Growth Partners
We should celebrate the resilience of the market; however, this success needs to be tempered by the
realization that the overall economy has not fared quite as well. Unemployment skyrocketed in April to
nearly 14.7% (or nearly 23% if we include underemployed and discouraged workers). By the end of the
year, unemployment has improved somewhat but is still at a high 6.7%. Underemployment is a major
issue as we enter 2021, both from an economic perspective in a consumer-driven economy and from a
humanitarian perspective in making sure that everyone has sufficient access to healthcare and
necessities.
Private equity and venture capital velocity slowed in Q2 but saw renewed momentum in the second half
of the year. According to CB Insights, venture capital-backed companies raised nearly $130 billion (14%
more compared to 2019) across over 6,000 investments. While investment activity overall continued to
thrive despite COVID-19, investors strongly favored larger, established companies, with seed-stage deals
declining significantly in the year.
Private equity firms also saw a resurgence of activity in the second half, completing over 2,700
transactions worth over $200 billion in the United States alone. M&A followed-suit, with $545 billion in
aggregate U.S. transaction value in Q4 alone, compared to just $77.3 billion in Q2. The second-half set
numerous records, both in terms of volume and value of transaction activity, yielding a strong overall
year despite the complete halt on almost all activity in Q2 during the onset of the COVID-19 pandemic.
Moving into 2021, the markets have settled into a strong bull-market mentality, fueled by multiple
newly approved vaccines for COVID-19 and confidence in continued government stimulus programs. As
we enter 2021, we have many reasons to be hopeful for the future. COVID-19 will continue to be a
significant drag on the economy in the short-term as it continues to infect and kill thousands every day;
however, there is a light at the end of the tunnel, and we expect to see some favorable effects from the
vaccines in the coming months.
UNEMPLOYMENT RATE
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20
U-3 (official)
U-6 (including underemployed and discouraged workers)
23
HEALTH IT HEADLINES
7
Notable headlines from 2020 are outlined in the following pages on a quarterly basis. The headlines
in 2020 illustrate the significant influence that policy and regulatory intervention has on the
incentives that dictate health IT investment and innovation trends, the increasing vertical integration
across healthcare, and the expanding presence of non-traditional companies in the health IT market.
Q1 HEADLINES
Snohomish County man is first U.S. case of new coronavirus
January 21: The first case of Wuhan Coronavirus reported in the United States is a Snohomish County
man in his 30s who traveled to China., federal and local officials announced January 21st. At the time,
there were 440 cases reported worldwide Tuesday, and the U.S. joined a growing list of places
outside mainland China reporting cases, following Thailand, Japan, South Korea and Taiwan.
Epic ramps up campaign against HHS interop rules
January 24: Epic CEO Judy Faulkner escalated her campaign against HHS' data sharing rules, triggering
backlash from patients and advocates who say she's trying to protect the Wisconsin company's
business interests at patients' expense. She argued that the rules don't provide privacy protections
for patients, and that once patients send the data into unregulated apps that might sell or exploit it,
it's impossible to get it back.
Practice Fusion to pay $145 million to resolve criminal and civil investigations
January 27: As part of the criminal resolution, Practice Fusion admits that it solicited and received
kickbacks from a major opioid company in exchange for utilizing its EHR software to influence
physician prescribing of opioid pain medications.
Google-Backed One Medical surges 58% in trading debut
February 1: 1Life Healthcare Inc., a provider of tech-driven primary care clinics under the One
Medical brand, closed its first day of trading up 58% after raising $245 million in an initial public
offering. The shares closed Friday at $22.07, giving the company a value of $2.7 billion. The company
priced them Thursday at the bottom of the $14 to $16 target range.
UnitedHealth stock suffers worst day in nearly 9 years as Sanders’ Nevada win stokes investor fear
February 25: Shares of UnitedHealth plunged toward their worst day in nearly 9 years, declining 7.8%,
as the narrative around a potential Bernie Sanders nomination may have swung to negative from
positive following the senator’s surprisingly big win in Nevada.
Shares of Centene Corp,which
provides programs and services to government-sponsored health-care programs, plunged 9.4%.
U.S. stocks tumble 11% in worst week since 2008 crisis
February 28: The spread of the coronavirus rattled global financial markets, sending U.S. stocks to
their worst week since the financial crisis more than a decade ago. The S&P 500 plunged 11% in the
five days. Treasuries surged, pushing yields on the 10- and 30-year notes to record lows during the
period. Oil plunged toward $45 a barrel in its biggest weekly rout since 2008.
Copyright© 2021 Healthcare Growth Partners
HEALTH IT HEADLINES
24
7
HIMSS cancels conference due to coronavirus
March 5: HIMSS has canceled its annual health information and technology conference in the wake of
the COVID-19 outbreak. It marks the first time in 58 years that the event has been canceled.
President Donald Trump had been scheduled to speak on March 9, marking the first time a sitting
president would have given remarks at the event and leading some to predict HHS planned to release
final versions of long-awaited information-blocking and interoperability rules at HIMSS20.
HHS releases final interoperability, data blocking regulations
March 9: The Trump administration released widely anticipated rules that change how providers,
insurers and patients exchange health data. The regulations will allow patients to access and
download their health records with third-party apps. Putting patients in charge of their health records
is a key piece of giving patients more control in healthcare, and patient control is at the center of the
Trump administration’s work toward a value-based healthcare system, Trump officials said.
CMS lays out regulatory relief for value-based care programs amid COVID-19 pandemic
March 22: The Trump administration has extended the deadlines for quality reporting and
applications for providers in value-based care programs. CMS released relief for regulatory
requirements as providers face the growing tide of COVID-19 patients. CMS also announced it will not
use any quality data on services from Jan. 1 through June 30 in the agency’s calculations for quality
reporting and value-based purchasing programs.
OCR will ease restrictions on telehealth tech during COVID-19
March 17: The Office for Civil Rights (OCR) announced, effective immediately, that it will exercise its
enforcement discretion and will waive potential penalties for HIPAA violations against health care
providers that serve patients through everyday communications technologies during the COVID-19
nationwide public health emergency. This exercise of discretion applies to widely available
communications apps, such as FaceTime or Skype, when used in good faith for any telehealth
treatment or diagnostic purpose, regardless of whether the telehealth service is directly related to
COVID-19.
Apple and Google partner on COVID-19 contact tracing technology
April 10: Across the world, governments and health authorities are working together to find solutions
to the COVID-19 pandemic, to protect people and get society back up and running. Software
developers are contributing by crafting technical tools to help combat the virus and save lives. In this
spirit of collaboration, Google and Apple are announcing a joint effort to enable the use of Bluetooth
technology to help governments and health agencies reduce the spread of the virus, with user
privacy and security central to the design.
CMS issues recommendations to re-open health care systems in areas with low incidence of CV-19
April 19: As the US continues to face the unprecedented public health emergency from the COVID-19
pandemic, the tide is turning and some areas throughout the country are seeing a decline in cases. As
states and localities begin to stabilize, the Centers for Medicare & Medicaid Services (CMS) is issuing
guidance on providing essential non-COVID-19 care to patients without symptoms of COVID-19 in
regions with low and stable incidence of COVID-19. This is part of Phase 1 in the Trump
Administration’s Guidelines for Opening Up America Again.
Copyright© 2021 Healthcare Growth Partners
Q2 HEADLINES
HEALTH IT HEADLINES
25
7
Hospitals ask Congress for another $100 billion COVID-19
May 1: In an odd twist to the pandemic, hospitals are actually struggling financially as beds that
would have been taken by non-COVID patients sit empty. Health care workers are bearing the brunt
of the distress, having their hours and pay cut.
As Trump pushes to reopen, government sees virus toll nearly doubling
May 4: The projections, based on data collected by various agencies, including the Centers for
Disease Control and Prevention, and laid out in an internal document obtained Monday by The New
York Times, forecast about 200,000 new cases each day by the end of May, up from about 30,000
cases now. There are currently about 1,750 deaths per day, the data shows.
The U.S. death toll has reached 100,000
May 27: One hundred thousand Americans dead in less than four months. The death toll from the
coronavirus passed that hard-to-fathom marker on May 27, which slipped by like so many other days
in this dark spring, one more spin of the Earth, one more headline in a numbing cascade of grim
news.
U.S. health agency reverses Obamacare transgender protections
June 12: The U.S. Department of Health and Human Services issued a rule that would lift anti-
discrimination protections under Obamacare for transgender people and women seeking abortions,
drawing condemnation from Democratic lawmakers. The rule reverses some provisions of the
Affordable Care Act passed during President Barack Obama’s administration, also known as
Obamacare, that extended civil rights protections in healthcare to cover areas including gender
identity and the termination of a pregnancy.
Hospitals lose lawsuit against HHS over price disclosure rule
June 23: Industry groups representing hospitals and health systems across the nation sued HHS last
year, challenging a rule that requires hospitals to disclose the rates they negotiate with insurers
beginning in 2021. On June 23, a federal judge granted HHS' motion for summary judgement.
Under a final rule issued in November, hospitals are required to disclose the standard charges,
including payer-specific negotiated rates, for all services beginning next year.
CMS creates new Office of Burden Reduction and Health Informatics
June 24: The CMS has formed the new Office of Burden Reduction and Health Informatics – an
outgrowth of its Patients over Paperwork Initiative, whose mission is eliminating red tape in
healthcare documentation and, officials say, "permanently embeds a culture of burden reduction
across all platforms of CMS agency operations.“ The new office is meant to bolster CMS's efforts to
decrease the hours and costs clinicians and providers incur for CMS-mandated compliance.
Copyright© 2021 Healthcare Growth Partners
University of California Health creates centralized data set to accelerate COVID-19 research
July 15: Drawing on electronic health records from across its academic health system, University of
California Health has developed a unified, secure data set for use in COVID-19 research. The HIPAA
Limited Data Set consisting of clinical information with more than 460 million data points is accessible
to researchers across the entire UC system, enabling them to rapidly compare treatment options
from previous patients to help future patients.
Q3 HEADLINES
HEALTH IT HEADLINES
26
7
Virginia first state to fully deploy COVID-19 exposure notification app based on Apple-Google tech
August 6: The Virginia Department of Health says the app, called COVIDWISE, is fully opt-in for
residents, includes stringent privacy protections (including not collecting location data or personal
information) and will not be used for the state's contact tracing efforts. Instead, app users can notify
others and get exposure notifications following positive COVID-19 test results. If they choose to
report their result, Virginia residents positive are provided a personal identification number they
enter into COVIDWISE to verify their identity and make sure exposure notifications are legitimate.
Other app users will then get a notification if their phones were within six feet of the infected
individual within the past two weeks, based on the strength and duration of the Bluetooth signal.
HHS chief information officer abruptly resigns
August 14: Arrieta told senior leaders that he would stay on for up to a month to help with the
transition, said two individuals with knowledge of his plans. He departs just four months after the
department stood up the public data sharing hub HHS Protect, and a little over a year since he took
over as chief information officer.
Firm Collecting Virus Data, TeleTracking, Refuses to Answer Senators’ Questions
August 14: In a letter dated Aug. 3, a lawyer for TeleTracking Technologies cited the nondisclosure
agreement in declining to say how it collects and shares data. The lawyer refused to share the
company’s proposal to the government, its communications with administration officials and other
information related to the awarding of the contract. That contract has come under scrutiny in the
wake of an abrupt decision last month by Alex M. Azar II, who ordered hospitals to stop reporting
coronavirus patient data to the Centers for Disease Control and Prevention and instead send the
information to TeleTracking for inclusion in a new centralized coronavirus database. The order raised
alarms about data transparency and the sidelining of C.D.C. experts.
AMA releases 2021 CPT code set
September 1: The first major overhaul in more than 25 years to the codes and guidelines for office
and other outpatient evaluation and management (E/M) services was included in September’s
release of the 2021 Current Procedural Terminology (CPT®) code set published by the AMA. These
foundational modifications were designed to make E/M office visit coding and documentation
simpler and more flexible, freeing physicians and care teams from clinically irrelevant administrative
burdens that led to time-wasting note bloat and box checking.
Judge dismisses data privacy suit against University of Chicago and Google
September 9: Back in 2019, Healthcare IT News reported on a unique privacy case involving Google
and the University of Chicago Medical Center – which had been named as defendants in a class action
suit alleging that they'd failed to properly de-identify data used for machine learning research and
predictive analytics projects. On September 4, Judge Rebecca R. Pallmeyer granted the University of
Chicago and Google's motions to dismiss the suit.
As insurers move this week to stop waiving telehealth copays, patients may have to pay more for
virtual care
September 29: Starting Oct. 1, several private health insurers will no longer fully pay for virtual visits
under certain circumstances — effectively reinstituting costs for patients reliant on the virtual care
that has been heralded as a lifeline at a time when Covid-19 is still killing more than 700 Americans
each day.
Copyright© 2021 Healthcare Growth Partners
HEALTH IT HEADLINES
27
7
Copyright© 2021 Healthcare Growth Partners
Q4 HEADLINES
House Lawmakers Condemn Big Tech’s ‘Monopoly Power’ and Urge Their Breakups
October 6: House lawmakers who spent the last 16 months investigating the practices of the world’s
largest technology companies said that Amazon, Apple, Facebook and Google had exercised and
abused their monopoly power and called for the most sweeping changes to antitrust laws in half a
century. To amend the inequities, the lawmakers recommended restoring competition by effectively
breaking up the companies, emboldening the agencies that police market concentration and
throwing up hurdles for the companies to acquire start-ups. They also proposed reforming antitrust
laws, in the biggest potential shift since the Hart-Scott-Rodino Act of 1976 created stronger reviews
of big mergers.
Trump Administration Finalizes Rule Requiring Health Insurers to Disclose Price and Cost-Sharing
Information
October 29: The rule requires that almost all health insurance companies and self-insured plans
disclose pricing and cost-sharing information. Under this final rule, more than 200 million Americans
with private-sector insurance (both individual-market and employer-based) will have access to a list
of real-time price information, including cost-sharing, enabling them to know how much care will cost
them before going in for treatment.
Teladoc finalizes blockbuster deal with Livongo in less than 3 months
October 30: Teladoc announced Aug. 5 it planned to pay $18.5 billion in cash and stock for Livongo,
which provides diabetes monitoring and remote monitoring. The combination of two of the largest
publicly-traded virtual care companies will create a health technology giant just as the demand for
virtual care soars. The deal was wrapped up quickly, in under three months, as the companies likely
look to leverage the current financial tailwinds of the telehealth boom and investor interest in digital
health spurred by the COVID-19 pandemic.
Biden defeats Trump for White House, says ‘time to heal’
November 7: Democrat Joe Biden defeated President Donald Trump to become the 46th president of
the United States on Saturday and offered himself to the nation as a leader who “seeks not to divide,
but to unify” a country gripped by a historic pandemic and a confluence of economic and social
turmoil. Trump refused to concede, threatening further legal action on ballot counting. But Biden
used his acceptance speech as an olive branch to those who did not vote for him, telling Trump
voters that he understood their disappointment but adding, “Let’s give each other a chance.”
HHS finalizes rules to nix Part D rebate safe harbor, tie Part B prices to foreign countries
November 20: The Trump administration finalized a rule that gets rid of the safe harbor shielding
Medicare Part D rebates from the anti-kickback statute and a rule that will tie certain Medicare Part B
drug prices to those paid by countries overseas. Trump called for both rules to be published during a
flurry of executive orders back in September. The rebate rule is expected to generate significant
pushback from providers, payers and pharmacy benefit managers (PBM) that say it will harmfully
impact seniors' access to cheaper drugs. The so-called most-favored-nation rule will also change how
providers get paid for administering and storing Part B drugs. The rebate rule will replace the safe
harbor for Part D rebates, meaning they could be targeted under the federal anti-kickback law, with a
new safe harbor that applies only to discounts offered at the point of sale.
HEALTH IT HEADLINES
28
7
FDA Takes Key Action in Fight Against COVID-19 By Issuing Emergency Use Authorization for First
COVID-19 Vaccine
December 11: The emergency use authorization allows the Pfizer-BioNTech COVID-19 Vaccine to be
distributed in the U.S. “The FDA’s authorization for emergency use of the first COVID-19 vaccine is a
significant milestone in battling this devastating pandemic that has affected so many families in the
United States and around the world,” said FDA Commissioner Stephen M. Hahn, M.D.
Trump signs stimulus and government spending bill into law, averting shutdown
December 27: President Trump unexpectedly capitulated Sunday night and signed the stimulus bill
into law, releasing $900 billion in emergency relief funds into the economy and averting a Tuesday
government shutdown. He had demanded changes to the stimulus and spending package for a week,
suggesting he would refuse to sign it until these demands were met. This continued defiance caused
lawmakers from both parties to panic, worried about the implications of a government shutdown
during a pandemic. It was unclear what prompted him to change his mind late Sunday, but he was
under tremendous pressure from Republicans to acquiesce.
Drugmakers to hike prices for 2021 as pandemic, political pressure put revenues at risk
December 31: Drugmakers including Pfizer Inc, Sanofi SA, and GlaxoSmithKline Plc plan to raise U.S.
prices on more than 300 drugs in the United States on Jan. 1, according to drugmakers and data
analyzed by healthcare research firm 3 Axis Advisors. The hikes come as drugmakers are reeling from
effects of the COVID-19 pandemic, which has reduced doctor visits and demand for some drugs. They
are also fighting new drug price cutting rules from the Trump administration, which would reduce the
industry’s profitability.
Copyright© 2021 Healthcare Growth Partners
Copyright© 2021 Healthcare Growth Partners
29
ABOUT HEALTHCARE GROWTH PARTNERS
8
Healthcare Growth Partners (HGP) is an exceptionally experienced Investment Banking & Strategic
Advisory firm exclusively focused on the transformational Health IT market. We unlock value for our
clients through our Sell-Side Advisory, Buy-Side Advisory, Capital Advisory, and Pre-Transaction
Growth Strategy services, functioning as the exclusive investment banking advisor to over 120 health
IT transactions representing over $2 billion in value since 2007.
Our passion for healthcare inspires us to not only create value for our clients, but to also generate
broad, overarching improvements to the functionality and sustainability of health. With our focus, we
deliver knowledgeable, honest and customized guidance to select clients looking to execute high
value health IT, health information services, and digital health transactions.
CONTACT INFORMATION
Christopher McCord
Managing Director
chris@hgp.com
2001 Kirby Drive, Suite 814
Houston, TX 77019
(713) 955-7935
www.hgp.com
Securities offered through HGP Securities, LLC, member FINRA & SIPC, broker-dealer affiliate of Healthcare
Growth Partners, LLC.
Sources of Information:
CMS, CBS, CNBC, CNN, company press releases, company SEC filings, Dealogic, EY Global, FactSet,
FierceHealthcare, Forbes, FRED, Health Data Management, Healthcare Growth Partners database,
HealthLeaders Media, HIStalk, Mercom Capital Group, Mergermarket, Modern Healthcare, NVCA,
Pitchbook, PwC, Reuters, Rock Health, SIFMA, StartUp Health, The New York Times, and The Wall Street
Journal.
These statistics are presented for informational purposes only. While the information presented has been
obtained from sources deemed to be reliable, no representation or warranty, express or implied, is made as to
the accuracy or completeness of such information.
Copyright© 2021 Healthcare Growth Partners
30
HGP TRANSACTION EXPERIENCE
9
RCM
Vendor
HGP TRANSACTION EXPERIENCE
31
9
Copyright© 2021 Healthcare Growth Partners
HGP TRANSACTION EXPERIENCE
32
9
Copyright© 2021 Healthcare Growth Partners
33
APPENDIX A
Strategic M&A Highlights
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
CompuGroup
Medical
H&S Qualita
Provides solutions including patient management, disease and dosage
management, blood pressure level, spirometry and pulse oximetry which is
linked and can be viewed on a tablet, a laptop or a mobile.
na
Q1
ResMed
Snapworx
Software built on artificial intelligence that automates the outdated,
manual processing that slows down patient management.
na
Q1
Nestle Health
Sciences
LivingMatrix
Developer of a cloud-based application for Functional Medicine
Practitioners that streamlines and automates the paper intake process,
maps patient information into the Functional Medicine Timeline and Matrix
and makes tracking patients’ progress easy.
na
Q1
Healthgrades
eVariant
Provider of SaaS-based enterprise platform designed to modernize
physician alignment strategies with data analysis.
$150
Q1
HCA Healthcare
Valify
Develops a Web-based solution that allows healthcare organizations to
identify, benchmark, and track savings in purchased services.
na
Q1
SCI Solutions
Tonic Solutions
Provider of a patient data collection and payments platform designed to
collect any information from any patient on any device.
na
Q1
Teladoc
InTouch Health
Provides comprehensive telemedicine solutions and expertise that enable
physicians to perform real-time consults with patients.
$600
Q1
R1
SCI Solutions
The company offers PATIENT REFERRALS, a solution to connect and expand
reach to referring providers, capture and grow outpatient volumes,
streamline operations, and increase revenues; and PATIENT SCHEDULING,
an access management healthcare scheduling solution.
$190
Q1
Global
Healthcare
Exchange
Lumere
Provider of data-driven technology platform intended to improve patient
care. The company's platform provides both physicians and hospital leaders
with evidence-based data, information, and analytics.
$135
Q1
Infor Global
Solutions
Intelligent Insites
Provides healthcare organizations with a single system capable of locating
patients, staff, equipment, and inventory via information derived through
various wireless locating technologies.
na
Q1
Evive
WiserTogether
Treatment-guidance tool that helps people find the right treatment.
na
Q1
Clarivate
Analytics
Decision
Resources Group
Provides analytics and consulting services to help vendors identify, assess
and forecast medical-device and drug utilization trends and market
opportunities.
$950
Q1
Hill-Rom
Excel Medical
The company aggregates data from physiological monitors, medical devices
and its surveillance tools enable caregivers to evaluate data from multiple
sources and track trends that might point to patient deterioration.
$19.2
Q1
Imprivata
GroundControl
Provider of automation software for managing mobile devices in modern
enterprises.
na
Q1
AMN
Healthcare
Services
Stratus Video
Provider of interpreting, video and telecommunication services designed to
change the way limited English proficiency patients communicate with
their healthcare providers.
$475
Q1
HealthMark
Otech
Provider of patient intake management software and systems.
na
Q1
CompuGroup
Medical
Cerner - Germany
& Spain Assets
The products include medico and Soarian Integrated Care, which are health
information systems in Germany; Selene, a leading health information
system for public hospitals in Spain; and Soarian Health Archive, a system
for digitizing and storing health information.
$248
Copyright© 2021 Healthcare Growth Partners
APPENDIX A – M&A HIGHLIGHTS
34
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
OnShift
Avesta Systems
The company's CandidateCare and AssociateCare applications streamline
the process of attracting, identifying and building a skilled workforce and
provide services such as background checks and drug screening, employee
engagement surveys as well as HR support and consulting.
na
Q1
Medtronic
Digital Surgery
A pioneer in surgical artificial intelligence (AI), data and analytics, and digital
education and training.
na
Q1
symplr
The Patient
Safety Company
Offers cloud-based solutions that provide healthcare event reporting,
incident management, audit process control, management of clinical
governance, performance management, and quality improvement
na
Q1
Health Catalyst
Able Health
Developer of a software platform for physician organizations designed to
manage value-based programs.
$27
Q1
ShareCare
Visualize Health
Developer of a population health and quality measure attainment platform
for medical providers to close gaps in patient care and maximize value-
based reimbursements.
na
Q1
Smith &
Nephew
MiJourney
Developer of a patient management software that enables coordination
across the entire episode of care by administrators, physicians, and patients.
na
Q1
CentralReach
Thread Learning
Provider of an educational platform intended to facilitate learning
management of autism students.
na
Q1
Navihealth
Innovative
Healthcare
Delivery
Specializes in identifying and addressing social determinants of health in
order to improve quality of life and clinical outcomes for patients.
na
Q1
Roche
Diagnostics
OBI Medical
Developer of a software intended to accurately measure gas values in the
bloodstream.
na
Q1
RevSpring
Loyale
Healthcare
Provides solutions to develop financial relationships between providers and
their patients through financing options, balance notification, online
payment options, and secure digital communications..
na
Q1
Ginger
LiveBetter
App for better mental health and well-being.
na
Q1
HealthStream
NurseGrid
Developer of staffing, communication and schedule management tools
designed to modernize staffing processes for nurses.
$21.4
Q1 WebMD Health
Corp.
StayWell
Company
Provider of patient education and population health management services.
The company focuses on health engagement though health information and
education programs.
na
Q1
Press Ganey
Associates
NarrativeDx
The company's platform uses natural language processing and machine
learning to collect, analyze and visualize unstructured patient feedback from
internal and external sources and automatically highlight key areas for
improvement and provide specific recommendations.
na
Q1
Fresenius
Medical Care
North America
DGG
Developer of digital and scalable disease management programs for patients
with chronic diseases. The company is engaged in developing disease
management software for health insurance providers and global
pharmaceutical companies.
na
Q1
Thomson
Reuters
Corporation
Pondera
Solutions
Provider of fraud detection as a service intended to combat fraud, waste
and abuse in large government programs and health systems.
na
Q1
Valsoft
MacPractice
Developer of a practice management and clinical software built for doctors
who use macs.
na
Q2
Integrichain
Incorporated
Cumberland Life
Sciences
Life Sciences Division specializes in advisory services, business process
outsourcing, analytics solutions and systems implementation around
contracts, pricing and compliance for pharma manufacturers of all sizes..
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX A – M&A HIGHLIGHTS
35
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
UnitedHealth
Group
AbleTo
Provider of technology-enabled behavioral health care platform designed to
integrate behavioral and medical health care.
$470
Q2
Change
Healthcare
eRx Network
Provider of comprehensive, innovative, and secure data-driven claims
processing solutions for pharmacies.
$212.9
Q2
Kaufman Hall
Change
Healthcare -
Connected
Analytics
Business
Provider of enterprise performance management (EPM) software, data, and
management consulting services.
$55
Q2
Optum
NaviHealth
Provides post-acute care support solutions, including Advantage Navigator,
which helps Medicare Advantage plans to manage their post-acute care
spending, Post-Acute Compass, which helps hospitals for developing and
managing a network of providers to better assess and manage patients
following hospital discharge, and SeniorMetrix that provides a suite of
functional assessment and clinical decision-support technology
$2,950
Q2
Omada
Physera
The company's health tracking mobile application provides guided exercises,
track progress and connect with a therapist, enabling users to seamlessly
recover from injuries and get fit again.
$30
Q2 Ontario Systems
SwervePay
Provides cloud-based payment and customer service solutions to pay
medical bills via text.
na
Q2
Change
Healthcare
PDX
Provider of pharmacy management software and services intended to offer
innovative and patient care, medical accounting services and reporting tools
for operational management.
$208
Q2
R1
Cerner RevWorks
Cerner RevWorks consists of an array of revenue cycle management (RCM)
services ranging from discrete services related to claims processing and
denial management for both physician practices and health systems to
larger outsourcing agreements.
$30
Q2
Walmart
CareZone
Prescription
Management
Tech
CareZone’s prescription management technology and related patents.
na
Q2
Cedar Gate
Technologies
Citra Health
Solutions
The company engages in delivering comprehensive, technology-powered,
people-driven applications which aggregates clinical, financial, and patient
data from multiple sources to create a holistic perspective of a provider's
panel and individual patient touch points within the healthcare system.
na
Q2
Syntellis
Kaufman Hall &
Associates –
Software
Diivision
Provides financial and capital advisory services to the healthcare sector.
na
Q2
Lululemon
Mirror
Developer of a connected fitness platform designed to bring the essential
components of a great studio workout in-home.
$500
Q3
Dedalus
DXC Healthcare
Developer of healthcare software based in Tysons, Virginia. The open digital
health platform helps to improve care outcomes by delivering contextual
and actionable insights across the healthcare ecosystem.
$525
Q3
HealthEdge
Software
The Burgess
Group
Developer of a claims reimbursement management software designed to
streamline medical claims reimbursement. The company's SaaS-based
claims reimbursement management software offers network contract
modeling, historical claims payment analytics, CMS rate research and
forecasting as well as claims pricing and editing.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX A – M&A HIGHLIGHTS
36
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q3
Roper
Technologies
EPSi
Financial decision support tool.
$365
Q3
GENEX Services
Coventry
Workers Comp
Services
Provider of compensation cost and care management services intended to
enhance network development, clinical integration and operational
efficiencies at the client desktop.
$850
Q3
Teladoc Health
Livongo Health
Develops and operates a consumer digital health platform for people with
diabetes.
$18,500
Q3
Providence
Services Group
Navin, Haffty &
Associates
Offers a full range of consulting services that are strategically aligned with
MEDITECH’s solutions and future direction.
na
Q3
Health Catalyst
VitalWare
Developer of a cloud-based SaaS platform designed to easily document,
code, and audit healthcare records.
$120
Q3
Waystar
eSolutions
Offers revenue cycle solutions - products assist healthcare providers in
automating and enhancing workflow with regard to claims review, editing,
and denials/appeals management, as well as eligibility verification and payor
connectivity.
$1,350
Q3
Omnicell
Pharmaceutical
Strategies Group
340B Link combines industry-leading software, deep knowledge of the 340B
program, and software-enabled services.
$225
Q3
Qualifacts
Systems
Credible
Behavioral
Health
Developer of electronic health record and practice management software
for behavioral health clinics.
na
Q3
Bayer AG
Care/of
Provider of an online healthcare platform designed to recommend
personalized vitamins and supplements.
$157.5
Q3
GoodRx
Scriptcycle
The company partners with regional retail pharmacy chains to provide
discount offerings, control costs and comprehensively manage their
prescription business.
$60.1
Q3
Verisk Analytics
Franco Signor
The company offers comprehensive Medicare secondary payer (MSP)
compliance solutions to the largest employers, insurers, and third-party
administrators enabling them to mitigate exposures for primary plans and
offers services like insurer reporting, conditional payment resolution,
Medicare set-aside allocations, and post-settlement administration.
$160
Q3
Provation
ePreop
The company offers patient engagement and surgical case management
software that enables document management, quality outcome reporting,
coordinate perioperative care, billing support, readmission prevention and
other functions.
na
Q3
CorroHealth
TrustHCS
Provider of outsourced coding and health information management
consulting services to the medical sector.
na
Q3
CorroHealth
Visionary RCM
Based in India, provides revenue cycle management solutions.
na
Q3
CorroHealth
T-System
Provider of clinical documentation and coding services. The company's
emergency department information system services include physician and
nurse paper documentation systems and document management.
na
Q4
WellSky
CarePort Health
Provider of software to facilitate post-acute hospital care. The company
offers a web-based platform enabling hospitals, patients and post-hospital
care providers to coordinate and manage care across the post-acute care
continuum.
$1,350
Q4
Netsmart
Technologies
Tellus
Developer of an electronic visit verification and care management platform
intended to improve patient outcomes and management.
na
Q4
symplr
TractManager
The company's software suite offers business intelligence, compliance and
contract management tools to healthcare professionals and hospitals,
enabling them to create, oversee and effectively manage their contractual
agreements in compliance with regulations.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX A – M&A HIGHLIGHTS
37
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q4
RLDatix
Verge Health
Provider of risk management platform designed to leverage technology to
create meaningful improvements in regard to protecting patients and
protecting margins.
na
Q4
Teleperformance
USA
Intrado Health
Advocate
Business
Provider of health advocacy, navigation, and well-being and integrated
benefits programs.
$690
Q4
ExamWorks
Sedgwick (Peer
Review and
IME)
The group health peer review and independent medical examination assets
of Sedgwick.
na
Q4
Centene Corp.
Apixio
Offers CKX Platform, a cloud-based clinical knowledge exchange platform
that imports and reconciles patient data, and Patient Analyzer, which
provides a view of an integrated patient record comprised of coded data,
narrative text, and scanned documents
na
Q4
MultiPlan
HSTechnology
Solutions
Developer of an innovative healthcare technology platform intended to
reduce healthcare costs. The platform uses sophisticated data analytics and
tools to engage members and providers on both the front and back end of
healthcare.
$140
Q4
CompuGroup
Medical
eMDs
Provider of electronic health record and practice management software and
services to ambulatory care organizations.
$240
Q4
Cloudbreak
Health
UpHealth
The company's platform improves patient access to timely and personalized
digital care by delivering care management tools, remote monitoring
applications, ePharmacy delivery, behavioral health solutions and tech-
enabled primary care.
na
Q4
HealthStream
ANSOS Staff
Scheduling
Enterprise productivity management solution for healthcare providers that
want to anticipate workload requirements, meet staffing variations in real
time, and balance clinical needs with staff’s professional goals.
$67.5
Q4
DuvaSawko
Abeo
Management
The company's software specializes in revenue cycle management, practice
management, med suite billing and offers medical transcription services to
private practices, hospitals and surgery centers.
na
Q4
Imprivata
FairWarning
Provider of software to protect the health, wealth, and personal information
for healthcare, financial services, and other businesses.
na
Q4
Intelerad
Medical Systems
Digisonics
Provider of cardiovascular and obstetrics/gynecology information and
structured reporting systems. The company's platform consolidates multiple
systems to optimize the physician workflow, enabling cardiologists,
obstetricians and gynecologists to improve patient care.
na
Q4
Cedar Gate
Technologies
Deerwalk
The company's healthcare analytics platform offers actionable insights,
intelligent reporting and administrative solutions serving the needs of
payers, providers, employers and ASOs, including health plans, TPAs,
brokers and consultants.
na
Q4
Kyruus
Healthsparq
Offers a platform that provides members with cost and quality information
about doctors, hospitals and medical services, based on their individual
benefits.
na
Q4
Philips
BioTelemetry
Provides monitoring services and digital population health management for
healthcare providers, medical device manufacturing, and centralized core
laboratory services for clinical research.
$2,800
Q4
Gainwell
Technologies
HMS Holdings
Provider of health care revenue enhancement, accounts receivable
management and third-party electronic claims services.
$3,400
Q4
Zipari
HealthX
SaaS technology platform that delivers online healthcare portals to 12.8
million health plan members and 425,000 physicians, providing them with a
central data repository for key, real-time information.
na
Q4
Firstsource
Solutions
PatientMatters
Developer of patient registration and medical billing software intended to
reduce the stress of care, drive brand loyalty and improve and accelerate
cash collections.
$13
Copyright© 2021 Healthcare Growth Partners
38
APPENDIX B
Financial Sponsor Buyout Highlights
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
ABRY Partners
Centauri Health
Solutions
Developer of cloud-based data management software solution designed
to create custom solutions for health plans and hospitals, optimizing
government-sponsored healthcare reimbursement for the care and
coverage provided to health plan members and hospital patients.
na
Q1
HGCapital
Intelerad Medical
Systems
Provider of medical images, workflow and data management software.
The company's software specializes in medical imaging, distributed
radiology services, distributed architecture and workflow orchestration,
radiology and workflow modules.
$849.5
Q1
Ridgemont
Equity Partners
Healthmark
Provider of health information management services for medical clinics
and hospitals. The company's services involve the release of information
process creating a patient-centric experience with advanced
management and technology services.
na
Q1
Astorg
eResearch
Technology
Provider of health outcomes research services to biopharma sponsors
and contract research organizations.
na
Q1
Windjammer
Capital
Compex Legal
Services
Provider of litigation support services to the legal and insurance
communities designed to help clients to meet their minority purchasing
goals.
na
Q1
Arsenal Capital
Partners
BresMed Health
Solutions
Provider of health economics and outcomes research consultancy
service based in Sheffield, England.
na
Q1
SymphonyAI
Group
TeraRecon
Developer of 3D medical image processing systems intended to provide
solutions that impact clinical care across health systems.
na
Q1
Francisco
Partners
Smith Technologies
Provider of software suite for community and long-term care (LTC)
pharmacies, local government agencies, and utility districts.
na
Q1
Record
Reproduction
Services, Graue
Mill, TPE
Boulder, Iron
Creek, Milk
Street, Search
Fund Partners
Quest HIMS
Provider of medical record retrieval and medical record disclosure
management services for hospitals and medical groups based in Illinois,
United States. The company specializes in quality review, delivery
method verification, invoicing, delivery, and collection services for
healthcare organizations.
na
Q1
SunMed Advisors
Connextyx
Technologies
The company provides unique products for the healthcare market
including MedFlash, the electronic Personal Health Manager (ePHM),
Medical Alert US, a Personal Emergency Response Services (PERS)
product and Medical Transcription, Disease Management, Revenue
Cycle Management and Medical Consulting - Billing.
na
Q1
Genstar Capital
ConnectiveRx
Provider of patient prescription medication assistance and payment
reimbursement services.
na
Q1
The Blackstone
Group
HealthEdge
Software
Provider of next-generation claims and benefit administration, business
intelligence and portal software products for healthcare payors.
$730
Q1
Parthenon
Capital Partners
RxSense
Provider of pharmacy benefit management services, health savings
programs, and pharmacy technology services throughout the United
States.
na
Q1
Marlin Equity
Partners
SmartLinx Solutions
Developer of end-to-end workforce management and human capital
management software.
na
Q1
Main Capital
Partners
Alfa Kommun &
Landsting
The company's broad offering includes both complete information
systems and niche products, such as solutions for journaling, electronic
prescription, medication management and care planning.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX B – BUYOUT HIGHLIGHTS
39
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Verdane Capital
Conscriptor
Developer of medical journal documentation services and dictation
software based in Henan, Sweden. The company offers journal writing,
Medspeech hybrid dictation and dictation analysis to hospitals, clinics and
public primary care facilities.
na
Q2
Glide Buy Out
Partners
Corilus
Offers practice management systems, communication tools, electronic
patient records, data exchange and billing systems.
na
Q2
Summit Partners,
TPG Capital,
Silversmith
Capital Partners
Lifestance
Provider of behavioral healthcare and evidence-based treatment services.
The company offers psychiatry and medication management,
psychological testing and evaluation, Intensive Outpatient Programs
(IOPs) as well as child and adolescent services to patients suffering from
addiction, substance abuse and eating disorders.
$1,200
Q2
Nautic Partners
ProHealth Medical
ProHealth Medical, Inc. enables health systems to service its home
infusion patients rather than sending them to outside providers. The
service generates a new revenue source from existing patients and
resources in the rapidly-growing area of infusion services.
na
Q2
Nautic Partners
Bioplus
The company's service specialize at providing comprehensive benefit
investigations, financial and co-pay assistance, drug list review, outcome
reports for REMs and LDD reporting, timely patient status update,
financial savings and therapeutic outcomes and patient status reports,
enabling patients to enjoy 24/7 access to pharmacists.
na
Q2
Rubicon Venture
Partners
Central Logic
Leading provider of transfer center and on-call scheduling technology
solutions for healthcare systems.
$100
Q2
Sunstone
Partners
Med Tech Solutions
The company offers all-encompassing healthcare IT installation,
deployment and maintenance from in-office devices to cloud-based
applications, assess, implement and maintain compliant environments to
meet healthcare regulations.
na
Q2
Fusion Capital
Kalos
The company provides pharmacy software programs and hardware
systems that are used in a variety of settings such as retail pharmacies,
universities, and correctional facilities, and also engages in custom
designing and printing of promotional products and corporate apparel.
na
Q2
LLR Partners
TrueLearn
Provider of test preparation software for medical examinations. The
company's platform enables medicine students in preparing with SaaS-
based outcome-driven exam preparation techniques while making the
learning process fun, impactful and permanent.
na
Q2
Trinity Hunt
Partners
Juris Medicus
Provider of medical expert sourcing and case management services. The
company offers a team of professionals with extensive experience as
paralegals, legal assistants, litigation clerks, nurses, and medical records
specialists to make the medical expert process as efficient and effective
as possible for all involved.
na
Q2
Lightyear Capital
HealthPlanOne
Provider of an online marketplace for health insurance. The company
engages in offering health insurance sales and distribution through its
digital marketing, proprietary technology and call center operations,
enabling health insurance carrier and broker customers to research and
select health insurance plans in an efficient and compliant manner.
na
Q2
Nordic
Healthcare
Group
Health Innovation
Institute
Provider of health and social services and analytics intended to build a
better social and healthcare system. The company specializes in health
innovation, health IT, and medical equipment and governance in
healthcare, delivering clients with a high-quality product or service in an
efficient manner.
na
Q2
Hublo
MedGo SAS
An online platform for health care facilities to manage and solicit its
network of replacements, including over-time and on-call replacements.
na
Q2
ArchiMed
Actigraph
Developer of physical activity and sleep or wake monitoring device
designed to facilitate users to configure and initiate data collection.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX B – BUYOUT HIGHLIGHTS
40
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Thomas H. Lee
Partners
Seniorlink
Provider of in-home elder-care advice and care management services.
The company offers professional advice, education, in-home geriatric care
assessments and ongoing care management for elders and individuals
with disabilities while also offering a platform to connect caregivers with
the users.
$400
Q2
EXA Capital
eBenefits Network
Developer of HR tool intended for employee benefits management. The
company's tool provides premium and deduction management, billing
and reconciliations, claims integration, insurance enrollment, payroll
contributions and COBRA processing.
na
Q3
ABRY Partners
HealthEZ
Independent third-party administrator helping businesses of all sizes
design plans that work for them.
na
Q3
Francisco
Partners
Management
MyFitnessPal
Operates an online nutrition and calorie counter database that allows
users to record their food intake, and track calorie counting and food
plans
$345
Q3
Madison
Dearborn
Partners
Benefytt
Technologies
Health insurance technology company engaged in the development and
operation of private e-commerce health insurance marketplaces,
consumer engagement platforms, agency technology systems, and
insurance policy administration platforms.
$410
Q3
Renovus Capital
Partners
Futura Mobility
The company's services include advisory services, clinical mobility,
strategic planning and telemedicine, helping businesses to focus on their
core operations.
$13.5
Q3
TPG Capital,
Leonard Green &
Partners
WellSky
The company is a supplier of performance management and information
software systems for acute, non-acute, community-based care,
healthcare providers, accountable care organizations and governments
across the globe thus helping them to improve cost controls, productivity,
quality and meet the challenges of their rapidly changing industries.
$3,000
Q3
Parthenon
Capital Partners
Nuvem Health
Provider of pharmacy claims administration.
na
Q3
Parthenon
Capital Partners
340Basics
Developer of cloud-based pharmacy claims administration system.
na
Q3
TA Associates
Francisco
Partners
Edifecs
Serves as a data exchange, data sharing, and data infrastructure platform
between health insurance companies and outside parties including
physicians, clearinghouses, and other insurers.
$1,420
Q3
Vesey Street
Capital Partners
QualityMetric
Developer of patient-reported outcomes and clinical outcomes
assessment products and provider of scientific consulting and translation
services for the healthcare and life sciences companies.
na
Q3
GI Partners
Clinical Ink
Offers SureSource, a clinical trials solution that allows users to record
comments, explanations, and validated source data.
na
Q3
The Blackstone
Group
Ancestry
Provider of online genealogical services intended to discover the family
history of individuals.
$4,700
Q3
K1 Capital
Rethink First
Developer of a web-based autism treatment platform designed to place
evidence-based treatment services in the hands of every educator,
clinician or parent working with a child with special needs.
na
Q3
Reliance
Industries
Netmeds.com
Operates an online pharmacy chain and sells prescription and over-the-
counter (OTC) drugs.
$83
Q3
BID Equity
CareCenter Software
Developer of healthcare facility management software offering complete
software solution for inpatient, disability, rehabilitation and spa facilities
and outpatient services. The company's software specializes in
management of administration, billing, therapy, medicine and nursing
documentation.
na
Q3
Sunstone
Partners
Rsource Healthcare
Provider of revenue cycle management services to hospitals and health
systems.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX B – BUYOUT HIGHLIGHTS
41
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q3
FTV Capital
6 Degrees
Developer of healthcare reimbursement technology designed to enhance
health care cost containment solutions.
na
Q3
The Carlyle
Group
TriNetx
Operator of a global health research network intended to optimize clinical
trial design and recruitment processes.
na
Q3
Kohlberg Kravis
Roberts & Co.
1-800 Contacts
Offers contacts and supplies though phone, Internet, mail, or fax orders,
as well as customer service agents.
$3,100
Q3
The Chernin
Group
SketchyMedical
Online education company that teaches concepts through visual memory
techniques.
$30
Q3
JLL Partners
MedeAnalytics
Provide cloud-based analytics to hospitals to determine how clinical
performance impacts financial performance.
$225
Q4
Odyssey
Investment
Partners
ProPharma Group
Provider of outsourced medical information, pharmacovigilance and
compliance consulting services to the life sciences industry.
na
Q4
Veritas Capital
DXC Social Health
Division
The company offers technology-enabled, mission-critical solutions that
are fundamental to the administration and operations of health programs
which leads to reliable delivery of highly complex systems for public
sector clients.
$5,000
Q4
Gridiron Capital
Cubii
Maker of a stationary exercise peddler.
$85
Q4
Onex Partners
OneDigital Health
and Benefits
Employee benefits agency, provides employee benefits insurance
products and services to small and mid-sized businesses, and individuals.
$2,650
Q4
Accel-KKR
Surgical Information
Systems
Provides perioperative software to ASCs and hospitals.
na
Q4
Providence
Equity Partners
PatientNow
The company's management tool offers appointment scheduling, before-
and-after photos, a point of sale (POS), inventory management and
reputation management, along with providing an online patient portal.
na
Q4
Kainos Capital
Nutrisystem
Provider of weight-management products and services. The company
offers weight-management programs through pre-packaged food
deliveries and online or telephone diet counseling.
$575
Q4
ABRY Partners
Benefit Recovery
Group
Provider of healthcare subrogation services serving health plan
administrators and employers. The company offers subrogation and
compensation recovery services thereby saving costs for its clients by
recovering dollars.
$40
Q4
Frazier, 22C
Capital,
WindRose
Health, Adams
Street Partners
Accuity Delivery
Systems
Provides clinical documentation, coding, and client education services for
the healthcare sector.
na
Q4 Morgan Stanley US HealthConnect
Operator of a holding company providing education through a digital
platform for healthcare providers. The company focuses on diversified
areas such as oncology, cardiology and women's health using its unique,
data-driven strategic and consultative approach to help pharmaceutical
clients meet the information needs of healthcare providers.
na
Q4
Bindley Capital
Partners
DentalWorks USA
Operator of dental claim management and consulting agency. The
company focuses exclusively on managing workers' compensation dental
claims and serves self-insured employers, third-party administrators and
insurance carriers active in the workers' compensation industry.
na
Q4
OpenGate
Capital
Aurotech
Provider of digital and business services for the US federal healthcare and
adjacent civilian agencies. The company offers creative and actionable
business solutions in the areas of work management, program & portfolio
management, litigation & eDiscovery, business transformations, drug
lifecycle tracking and healthcare data archiving services.
na
Copyright© 2021 Healthcare Growth Partners
APPENDIX B – BUYOUT HIGHLIGHTS
42
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q4
Great Hill
Partners, Advent
International
RxBenefits
Provider of pharmacy benefit procurement and administration services
intended for employee benefits consultants and self-insured employers.
na
Q4
Northwestern
Mutual,
HarbourVest
Partners,
Mubadala
Investment, GHO
Capital
Envision Pharma
Group
Provider of technology and scientific communication that serves
pharmaceutical, biotechnology and medical device companies.
na
Q4
New Mountain
Capital
HealthComp
A full-service TPA providing medical, dental, vision, COBRA, and HIPAA
services. The company also provides flexible benefit plans, utilization
review, wellness, case management and other medical management
services.
na
Q4
Bain Capital
HST Pathways
Developer of cloud-based ambulatory surgery center (ASC) software for
single and multi-specialty ASCs, corporate management companies,
hospital outpatient and same-day surgical facilities.
$215
Q4
DW Healthcare
Partners
CareXM
Provider of virtual care and patient engagement solutions for post-acute
and non-acute healthcare providers.
na
Q4
Stone Point
Capital
Allied Benefit
System
The company designs creative self-insurance services for organizations
that choose to take control of their healthcare in collaboration with
clients and benefits consultants, enabling them to institute the right plan
to support the best options for employees and their families.
$475
Q4
Clearlake Capital
Group
nThrive Technology
Division
The business unit's end-to-end software-as-a-service (SaaS) platform
offers patient access, charge integrity, claims management, contract
management, machine learning and robotic process automation, data
and analytics and education software solutions to hospitals and health
systems.
$1,000
Q4
Novacap,
Investissement
Quebec
Logibec
The company develops administrative and clinical software tools as well
as health care information management software that integrates medical
and clinical content with administrative management functions
na
Q4
Serent Capital
Procurement
Partners
The company's platform provides an automated end-to-end purchasing
solution, encompassing the full purchasing cycle from product selection
to vendor payment also offering a compliance audit feature that helps to
reduce bottom-line vendor spend for its customers.
na
Q4
Linden Capital
Partners
Specialty Networks
Consulting
The company offers technical advisory services, taking into consideration
various changes in outcomes related to the effectiveness, delivery and
costs, enabling clients in the healthcare industry to strategize the vast
amount of information data analytics that can create actionable steps
with a proven outcome.
na
Q4
Thoma Bravo
Zipari
Designs and develops technology solutions for the health insurance
industry, including a CRM solution and a consumer experience platform.
$500
Q4
Nordic Capital
Cytel
Provider of analytical software and services for the life sciences sector.
$1,000
Q4
Hughes &
Company, STG
Azara Healthcare
Developer and provider of data-driven reporting and analytics software
designed for the community health marketplace.
na
Copyright© 2021 Healthcare Growth Partners