Semi-Annual
Market Review
HEALTH IT & HEALTH INFORMATION SERVICES
JULY 2019
www.hgp.com
Copyright© 2019 Healthcare Growth Partners
2
TABLE OF CONTENTS
Health IT Executive Summary
3
Health IT Market Trends
6
HIT M&A (Including Buyout)
9
Health IT Capital Raises (Non-Buyout)
14
Healthcare Capital Markets
15
Macroeconomics
19
Health IT Headlines
21
About Healthcare Growth Partners
24
HGP Transaction Experience
25
Appendix A – M&A Highlights
28
Appendix B – Buyout Highlights
31
Appendix C – Investment Highlights
34
1
11
10
9
8
7
6
5
4
3
2
12
Copyright© 2019 Healthcare Growth Partners
3
HEALTH IT EXECUTIVE SUMMARY
An Accumulating Backlog of Disciplined Sellers
1
Let’s chat about fireside chats. The term first used to describe a series of evening radio addresses
given by U.S. President Franklin D. Roosevelt during the Great Depression and World War II is now
investment banker speak for “soft launches” of sell-side and capital raise transactions.
Every
company has a price, and given a market of healthy valuations, more companies are testing the
waters to find out whether they can achieve that price. That process now looks a little more
informal, or how you might envision a fireside chat.
Price (or valuation) discovery for a company can range from a single conversation with an individual
buyer to a full-blown auction with hundreds of buyers and everything in between, including a fireside
chat. Given the increasing share of informal conversations, the reality is that more companies are for
sale than meets the eye.
While the healthy valuations publicized and press-released are encouraging more and more
companies to price shop, there is a simultaneous statistical phenomenon in perceived valuations that
often goes unmentioned: survivorship bias. Survivorship bias is the logical error of concentrating on
the information that made it past some selection process and overlooking the information that did
not, typically because of a lack of visibility. What this bias does in the M&A market is lead to false
conclusions around comparable valuations through a systemic selection bias towards high-profile,
high-value deals. Why does survivorship bias matter in how we value companies? Simply put,
companies are often valued based on perceptions of comparable transactions that closed and not on
those that didn’t.
As a result, survivorship bias of M&A valuation can inflate expectations for all sellers by basing value
on higher quality companies with closable transactions, not just those who meet such a standard.
“Fireside Chats” and
Informal Processes
Companies that
“Go-to-Market”
Transactions that Close
Published
Transaction
Values
Survivorship Bias
The valuations we see are the deals
that close, where, generally speaking, a
higher quality seller achieves their
asking price.
We don’t see and determine value
from the deals that don’t close, where
sellers, potentially of lower quality, do
not achieve their asking price.
13
31
30
31
38
52
54
0
10
20
30
40
50
60
2013
2014
2015
2016
2017
2018
2019
HEALTH IT EXECUTIVE SUMMARY
Copyright© 2019 Healthcare Growth Partners
4
1
Over the last five years, the number of US-based Health IT M&A (including buyout) transactions has
remained relatively steady at 300 deals per year. Of total Health IT M&A, less than 20% involve the
sale of a PE-backed company, and based on our 2019 data, this accounts for approximately 60 PE-
backed exit transactions per year. Going back to 2010, the accrued number of HIT PE-backed venture
and growth investments exceeds 1,200 companies that have yet to reach a liquidity event, implying a
significant backlog of companies that have yet to transact. Using a simple extrapolation and
assuming all companies exit, an accrual of 1,200 companies with 60 PE-backed companies trading
annually implies a 20-year backlog.
Based on 2019 data, 18% of US-based Health IT M&A
and buyout transactions involved a seller that had
previously raised institutional venture capital or growth
equity in excess of $2mm, implying that 82% of Health
IT transactions involve bootstrapped sellers. PE-backed
companies generally have a higher valuation bar to
clear because the return requirements are based on the
valuations of the prior funding rounds which are
generally higher since investment valuations tend to be
higher than M&A valuations.
Bootstrapped
82%
2019 Bootstrapped vs. PE-Backed Exits
PE-Backed Exits
Active HIT PE-Backed Investments by Most
Recent Funding Year
PE-Backed,
18%
With our unique lens into the market, HGP is witnessing an increasing volume of companies
undergoing some degree of exploration of a potential sale. Regardless of whether these companies
pursue informal conversations or hire an investment bank to run an auction, the higher volume of
M&A discussions is effectively reducing the close-rate of M&A transactions, thereby increasing the
statistical error of survivorship bias.
Fireside chats and informal sale processes are making an impact.
In a report about the potential
disruption of investment banking, CB Insights wrote: “The last few years have seen a significant uptick
in the number of private M&As undertaken without the assistance of an investment bank. In 2015,
according to Dealogic, 26% of M&A deals worth $1B+ took place without outside financial advisors, a
13% increase from the year before.”
*
* Data annualized for 2019
0
50
100
150
200
250
300
350
2014
2015
2016
2017
2018
HEALTH IT EXECUTIVE SUMMARY
Copyright© 2019 Healthcare Growth Partners
5
1
The informal nature of many M&A discussions creates opportunities and challenges for both buyers
and sellers. In terms of opportunity, fireside chats can turn into preemptive transactions which allow
buyers and investors to transact outside of an auction, enabling both parties to get the deal done
quickly and efficiently. The challenge for buyers is that informal processes require proactive efforts
to get in front of transactions, and for sellers, the sheer volume of informal discussions means that
there are more companies competing for the attention and capital of buyers than meets the eye.
Why do companies pursue fireside chats or informal processes rather than hire an investment banker
to run an auction? Our response is that, in many cases, these companies intuitively know that the
valuation they’re seeking is a stretch and do not want to invest the resources into a full sale process
and the negative perception that may come with one that fails.
A fascinating takeaway is that valuations remain high in the face of a rising supply of transactable
companies, bucking basic economic theory. Sellers would rather not transact than accept a lower
price, and as such, the market remains in equilibrium from a valuation perspective. This balance
holds even though seller valuation expectations are often distorted based on the set of highly visible
transactions that close and not on those that aren’t publicized or don’t close at all.
To absorb the rising supply of Health IT companies, one or a combination of the following must occur:
1. Health IT sellers must perform at a level to meet the valuation expectations that are set
based on high performing transactions that close.
2. More buyers must enter the market to meet the rising supply of sellers.
3. Prices must come down.
Based on strong Health IT market fundamentals, we’re optimistic that the outcomes will be #1 and
#2, but we’re closely monitoring the data for early indicators of #3. Only time will tell.
Percent of PE Investments that Have Exited by Most
Recent Funding Date
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2010
2011
2012
2013
2014
2015
2016
2017
Copyright© 2019 Healthcare Growth Partners
6
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 we observe 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. While telemedicine,
population health, and analytics see the highest median revenue multiples, these sectors also see a
large amount of variability and positive skew. For instance, while 25% of the observed population
health companies received 6.7x revenue or more in sale transactions during the period, another 25%
received less than 2.6x 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.
Of particular note this year, the median revenue multiples in the Telemedicine and Clinical Trial
Management sectors have jumped significantly from 5.6x and 4.5x to 7.8x and 6.6x respectively. We
attribute these increases partially to continued thesis-driven interest in these sectors, but also note
the relatively sparse data available on transactions in these spaces. With fewer than 10 revenue
multiples available in these two subsectors, the medians we are able to report are highly susceptible
to potential reporting bias and outlier data.
Reported
2014 – 1H 2019
Deals with
Disclosed
Revenue
Multiples
Deals with
Disclosed
EBITDA
Multiples
Revenue Multiple
EBITDA
Multiple
25th
%-tile
Median
75th
%-tile
Mean
Std.
Deviation
Median
Telemed
8
2
4.6x
7.8x
10.6x
7.7x
4.2x
18.1x
Clinical Trial Mgmt
6
4
2.6x
6.6x
7.6x
5.6x
2.9x
14.1x
Population Health
41
10
2.6x
4.3x
6.7x
6.1x
5.9x
14.2x
Analytics
18
8
3.0x
4.2x
5.0x
4.5x
2.4x
16.2x
Benefits Mgmt
16
2
2.4x
4.1x
6.0x
5.7x
5.7x
17.5x
Content
14
2
2.8x
3.8x
6.9x
5.0x
3.0x
11.2x
RCM Tech
20
15
2.8x
3.5x
6.1x
4.2x
2.1x
16.0x
PM/EMR
34
18
1.7x
3.5x
5.0x
3.6x
2.0x
14.0x
Infrastructure Tech
26
18
2.4x
3.4x
5.0x
3.7x
1.9x
10.8x
Utilization Mgmt
7
4
0.7x
2.5x
3.2x
2.7x
2.6x
10.4x
RCM Services
11
9
1.6x
2.3x
3.5x
2.4x
1.0x
9.6x
Consulting
18
9
1.2x
1.8x
2.4x
2.2x
1.4x
9.8x
Outsourced Services
17
10
1.2x
1.6x
2.7x
2.0x
1.2x
9.7x
HEALTH IT MARKET TRENDS
Copyright© 2019 Healthcare Growth Partners
7
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 (blue columns) is the 75th Percentile minus the 25th Percentile and
serves to describe the variation in the range of outcomes. 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
is also much 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
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.
HEALTH IT MARKET TRENDS
Copyright© 2019 Healthcare Growth Partners
8
2
Sector
Description
Representative Deals
Telemed (8 deals)
Median: 7.8x
Std. Dev.: 4.2x
Contains a mix of pure telemedicine
services and connected device
transactions.
PillPack (Amazon), Best Doctors
(Teladoc), Advance Medical (Teladoc),
Healthiest You (Teladoc)
Clinical Trial Mgmt (6 deals)
Median: 6.6x
Std. Dev.: 2.9x
Includes traditional CTMS vendors as
well as other vendors that deliver
value in the clinical trial process.
Medidata (Dassault Systemes), Bracket
Global (Genstar Capital), Phlexglobal
(Vitruvian Partners)
Analytics (18 deals)
Median: 4.2x
Std. Dev.: 2.4x
Primarily represents a mix of life
sciences and provider analytics, and
to a lesser extent, payer analytics.
Explorys (IBM), Truven (IBM), Strata
(Roper), IMS (Quintiles),
MedeAnalytics (Thoma Bravo)
Population Health Mgmt (41 deals)
Median: 4.3x
Std. Dev.: 6.1x
Comprised of patient engagement,
provider connectivity, and care
management technologies.
Propeller Health (ResMed), Emmi
(Wolters Kluwer), Press Ganey (EQT),
Wellcentive (Philips), Phytel (IBM)
Benefits Management (16 deals)
Median: 4.1x
Std. Dev.: 5.7x
Includes benefits management and
admin software companies serving
payers and employers.
Connecture (Francisco Partners),
HealthX (JMI), Benaissance (WEX),
bswift (Aetna), Matrix (Express Scripts)
Content (14 deals)
Median: 3.8x
Std. Dev.: 3.0x
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)
RCM Tech (20 deals)
Median: 3.5x
Std. Dev.: 2.1x
Includes tech-oriented RCM vendors
serving hospitals and physicians, and
to a lesser extent, payers.
InstaMed (JPMorgan), Cotiviti
(Verscend), ABILITY (Inovalon), Zirmed
(Navicure), Brightree (ResMed)
PM/EMR (34 deals)
Median: 3.5x
Std. Dev.: 2.0x
Includes ambulatory, acute, post-
acute, alternate site, and
departmental EMR/PM systems.
athenahealth (Veritas), Kinnser
(Mediware), Mediware (TPG),
Netsmart (Allscripts/GI), Merge (IBM)
Infrastructure Tech (26 deals)
Median: 3.4x
Std. Dev.: 1.9x
Compliance and resource
management software generally
serving provider organizations.
Symplr (Clearlake), Datix (Rothschild),
Morrisey (HealthStream), CenTrak
(Halma), VendorMate (GHX)
Utilization Mgmt (7 deals)
Median: 2.5x
Std. Dev.: 2.6x
Payer-oriented software and services
vendors focused on traditional
utilization management.
New Century (Evolent), HealthHelp
(WNS), Alere (Abbott), HSM & CDMI
(Magellan)
RCM Services (11 deals)
Median: 2.3x
Std. Dev.: 1.0x
Outsourced revenue cycle
management services generally
serving hospitals and physicians.
MedPartners (AMN), Intermedix (R1),
Anthelio (Atos), Cardon (MedData),
Equian (New Mountain)
Consulting (18 deals)
Median: 1.8x
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)
Outsourced Services (17 deals)
Median: 1.6x
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© 2019 Healthcare Growth Partners
9
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
Among the many business and market characteristics that drive superior valuations, the following are
core components to healthcare IT businesses that have established themselves as outliers:
1 SaaS Architecture and Delivery
• Single database enabling robust analytics
• Delivery model that creates scale on the
cost side, and recurring revenue on the
top line
2 Pricing Alignment with ROI
• Pricing methodology that aligns with
customer ROI – the vendor wins when
the customer wins
3 Scalable Distribution Model
• Efficient distribution model (eg, customer
acquisition cost
is
less
than
total
customer value)
4 Data Rights
• Contract structures that contain explicit
rights to data
5 Reform-Centric Value Proposition
• Addresses healthcare structural flaws
rather than take advantage of them in
an effort to deliver sustainable change
in a policy-based environment
6 Pricing Alignment with ROI
• Market leadership (or opportunity to
lead) creates favorable supply/demand
characteristics at exit
• Large and growing market opportunity
with strong financial characteristics
which include recurring revenue and
growth,
inherent scalability
if not
profitability, strong management, and
size
0%
10%
20%
30%
40%
50%
0-1X
1-2X
2-3X
3-5X
5-7X
7-10X
>10X
Software
Services
HEALTH IT M&A (INCLUDING BUYOUT)
Copyright© 2019 Healthcare Growth Partners
10
3
The following chart summarizes annual M&A activity since 2014, according to the Healthcare Growth
Partners database.
While deal valuation has remained healthy, the volume of Health IT M&A activity seems to have
leveled off since 2016, and 2019 is on-pace to continue that trend. After 372 transactions in 2017 and
362 transactions in 2018, we have seen a total of 187 transactions so far in 2019 which equates to
374 when annualized. Total transaction value tends to be much more volatile than deal volume since
it only takes one or two very large deals to skew the data and the majority of transactions do not
disclose value, thus HGP looks toward transaction volume as a better indicator of deal activity.
Generally, sub $100 million companies have three valuation inflection points: proof-of-concept,
growth scalability, and mature scalability.
0
5
10
15
20
25
30
0
2
4
6
8
10
12
14
16
Stage of Growth Valuation
Proof of Concept
Growth Scalability
Mature Scalability
Revenue <$1mm
Revenue $5-10mm
Revenue >$20mm
Stage of Growth Chart (for Companies <$100mm in Revenue)
$35,749
$14,014
$53,875
$28,978
$37,164
$19,783
$2,520
$1,084
$905
$771
$1,090
$83
274
285
295
302
284
149
47
51
77
70
78
38
0
50
100
150
200
250
300
350
2014
2015
2016
2017
2018
1H-2019
$-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
$45,000
$50,000
$55,000
$60,000
Deal VolumeDeal Value ($mm)Deal Value - US
Deal Value - Non-US
Deal Volume - US
Deal Volume - Non-US
HEALTH IT M&A (INCLUDING BUYOUT)
Copyright© 2019 Healthcare Growth Partners
11
3
Proof-of-concept is value created when a company shows that its product can be successfully sold
and deployed in a commercial setting. The proof-of-concept inflection point is generally of more
importance to venture investors than it is to acquirers, as companies at this stage tend to be too
immature to realize significant value through a sale. 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. Mature scalability takes place after a company has matured to a
level where it takes on real infrastructure, and the company begins to show strong profitability after
building out a mature corporate organization.
Although the size of a company at each inflection point can vary significantly based on a company’s
product or services and sector, the general rule of thumb in health IT is that proof of concept occurs
at revenue of less than $1 million, growth scalability occurs in the $5 to $10 million revenue range,
and mature scalability occurs starting in the $20 million revenue range.
HIT Software Companies
HIT Services Companies
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
All
Transactions
# of Transactions
183
79
188
54
33
55
Median
3.9x
14.0x
$ 137.60
1.9x
9.8x
$ 170.00
Mean
4.9x
15.3x
$ 559.50
2.2x
10.8x
$ 669.53
<$30mm
Transactions
# of Transactions
47
10
45
13
8
13
Median
2.4x
9.3x
$ 10.00
1.4x
9.0x
$ 15.90
Mean
4.3x
10.7x
$ 11.27
1.5x
9.2x
$ 14.25
$30-100mm
Transactions
# of Transactions
36
14
36
11
7
11
Median
3.8x
10.5x
$ 52.65
1.4x
8.0x
$ 47.00
Mean
5.3x
12.5x
$ 55.13
1.6x
8.0x
$ 55.35
$100-500mm
Transactions
# of Transactions
63
27
68
19
11
19
Median
4.3x
14.0x
$ 207.50
2.1x
10.9x
$ 247.30
Mean
4.9x
16.4x
$ 229.43
2.8x
11.0x
$ 294.68
$500mm-$1B
Transactions
# of Transactions
16
10
18
5
2
5
Median
5.4x
16.1x
$ 712.50
2.7x
11.5x
$ 690.00
Mean
5.3x
16.9x
$ 685.80
2.8x
11.5x
$ 665.64
>$1B
Transactions
# of Transactions
21
18
21
6
5
7
Median
4.4x
15.8x
$ 2,366.42
2.6x
15.5x
$ 4,094.87
Mean
5.1x
17.6x
$ 3,559.46
2.7x
16.4x
$ 3,871.85
HEALTH IT M&A (INCLUDING BUYOUT)
Copyright© 2019 Healthcare Growth Partners
12
3
Continuing the analysis on the prior page, HGP evaluated the distribution of transaction size by target
enterprise value. HIT Software valuations experience a nice inflection above $30mm in value, which
steadily climbs until approximately the $1B valuation mark. HIT Services multiples experience a
similar inflection at $100mm, especially with higher percentile 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.
In the first half of 2019, Healthcare Growth Partners monitored 187 health IT and related services
M&A transactions, compared to 362 transactions in 2018. In terms of aggregate deal dollar value,
HGP observed $19.9 billion of total transaction value so far in 2019, a value that puts the market on
track to exceed the $38.2 billion of total transaction value reported in 2018. The median revenue
multiple in 2019 so far is 4.9x for HIT Software, just below the 5.3x we saw in 2018. HIT Services
revenue multiples appear to be relatively flat compared to prior years as well, hovering just above
2.0x revenue.
Detailed annual trends can be found in the following bar chart.
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 1H 2019.
HIT Software Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
7.3x
10.3x
8.5x
7.7x
8.5x
75th Percentile
4.5x
7.2x
6.1x
6.8x
7.0x
50th Percentile
2.4x
3.8x
4.3x
5.4x
4.4x
25th Percentile
1.6x
2.8x
2.9x
3.9x
3.4x
HIT Services Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
2.4x
2.6x
5.7x
nm
nm
75th Percentile
2.0x
2.1x
3.6x
4.8x
3.3x
50th Percentile
1.4x
1.4x
2.1x
2.7x
2.6x
25th Percentile
1.1x
1.1x
1.6x
0.8x
2.3x
HEALTH IT M&A (INCLUDING BUYOUT)
Copyright© 2019 Healthcare Growth Partners
13
3
It is important to 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
represents only a portion of the overall transaction activity.
MEDIAN M&A MULTIPLES 2010-2018
HIT M&A DEALS BY QUARTER
71
97
77
76
90
68
93
85
99
86
103
84
97
89
91
95
81
106
96
79
101
86
0
20
40
60
80
100
120
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2014
2015
2016
2017
2018
2019
*insufficient data to display 2019 EBITDA multiples.
3.7X
3.8X
3.9X
3.4X
5.3X
4.9X
14.0X
14.0X
14.0X
14.0X
15.6X
15.0X
0.0X
5.0X
10.0X
15.0X
20.0X
2014
2015
2016
2017
2018
2019
Health IT SoftwareRevenue
EBITDA
1.2X
2.0X
1.8X
1.9X
2.4X
2.1X
10.0X
9.0X
10.0X
9.6X
10.2X
0.0X
5.0X
10.0X
15.0X
2014
2015
2016
2017
2018
2019
Health IT ServicesRevenue
EBITDA
*
Copyright© 2019 Healthcare Growth Partners
14
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 2014 according to the Healthcare Growth Partners database. The data below
and in this section do not include buyout private equity activity. In the first half of 2019, Healthcare
Growth Partners monitored 400 capital raise transactions amounting to nearly $9 billion in value
which is on-track to meet or exceed 2018’s $16.4 billion and 797 transactions.
HIT INVESTMENT ACTIVITY
HIT INVESTMENT DEALS BY QUARTER
Refer to Appendix C for a list of notable non-buyout capital raises in 1H 2019.
74
100
117
92
88
122
101
115 107 97
134
155
128
189 189
154
202
239
196
155
174
226
0
50
100
150
200
250
Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2014
2015
2016
2017
2018
2019
$4,572
$6,186
$5,644
$7,464
$10,650
$5,985
$846
$996
$2,372
$3,181
$5,774
$2,928
313
362
361
411
537
271
71
66
133
254
260
129
0
100
200
300
400
500
600
2014
2015
2016
2017
2018
1H-2019
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
$16,000
$18,000
Deal VolumeDeal Value ($mm)Deal Value - US
Deal Value - Non-US
Deal Volume - US
Deal Volume - Non-US
Copyright© 2019 Healthcare Growth Partners
15
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 18.
Despite the increased anxiety over slowing economic growth, geopolitical tensions, and escalating
trade wars, the US market unexpectedly experienced its best first half since 1997. While the HIT,
CRO, and HIT & Payer Services Indices tracked closely to the S&P 500, both the Payers and Healthcare
Services Indices experienced low returns of 2.3% and 7.5%, respectively. Strikingly, the Payers Index
which was the leader in 2019 was outperformed by all but the PBM Index. Consistent with historical
trends, the PBM Index which has been in the crosshairs of both increased regulatory and competitive
moves, was the largest decliner, falling a record 26.9% over the period. The chart and the table on
the following page summarize the performance of the HGP Health IT and Services indices in 1H 2019.
HIT & RELATED INDEX PERFORMANCE 1H 2019
-40%
-30%
-20%
-10%
0%
10%
20%
30%
12/31/18
3/31/19
6/30/19
CRO
Health IT
Payers
PBM
Healthcare Services
HIT & Payer Services
S&P 500
Jan 31. – Trump administration
pitches an end to certain drug rebates
March 26 – White House says it will
ask a court to throw out Obamacare
May 9 – Trump announces plans to allow
US states to buy medicine abroad
May 15 – White House announces plans
to increase healthcare price transparency
1H 2019 Index Performance
S&P 500
17.3%
HIT
19.7%
Healthcare Services
7.5%
NASDAQ
20.7%
Payers
2.3%
HIT & Payer Services
16.6%
CRO
24.1%
PBM
-26.9%
April 7 – CMS expands Medicare
Advantage coverage to telehealth
April 22 – CMS announces plans to
launch direct-contracting pay models
HEALTHCARE CAPITAL MARKETS
Copyright© 2019 Healthcare Growth Partners
16
5
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Allscripts Healthcare
Solutions
20.6%
1.4X
7.8X
IQVIA
38.5%
3.8X
16.1X
Benefitfocus
-40.6%
3.2X
29.9X
iRhythm Technologies
13.8%
9.0X
NMF
Care.com
-43.1%
1.3X
9.1X
Medidata Solutions
34.2%
7.6X
26.3X
Castlight Health
48.8%
2.6X
NMF
MINDBODY
0.2%
NA
NA
Cerner
39.8%
4.1X
12.5X
Model N
47.4%
4.6X
NMF
Change Healthcare*
-2.7%
1.8X
5.9X
NantHealth
-3.4%
2.6X
NMF
Computer Programs &
Systems
10.7%
1.9X
9.6X
NextGen Healthcare
31.4%
1.9X
13.5X
ehealth
124.1%
5.7X
23.4X
NRC Health
51.0%
11.0X
NA
Evolent Health
-60.2%
1.0X
14.3X
Omnicell
40.5%
4.1X
19.9X
Fitbit
-11.5%
0.3X
28.6X
Premier
4.7%
2.8X
8.2X
Health Insurance
Innovations
-3.0%
1.0X
4.9X
Roper Technologies
37.4%
7.9X
21.5X
HealthEquity
9.6%
15.2X
26.8X
Simulations Plus
43.5%
14.7X
NA
HealthStream
7.1%
2.7X
18.0X
Streamline Health
Solutions
86.4%
1.0X
9.2X
Hms Holdings
15.1%
4.6X
15.0X
Tabula Rasa Healthcare
-21.7%
4.5X
22.5X
Inovalon Holdings
2.3%
4.8X
13.3X
Teladoc
34.0%
8.8X
NMF
Invitae
112.5%
9.0X
NMF
Multiples based off 2019E Revenue and EBITDA
*Multiples for Change Healthcare based off 9 months ended 12/31/2018
Revenue Multiples
EBITDA Multiples
Sector
2019E
2020E
2019E
2020E
Health IT
4.1X
3.7X
15.4X
15.0X
CRO
2.9X
2.7X
14.1X
12.5X
Payers
0.6X
0.5X
9.9X
8.6X
PBM
0.5X
0.5X
10.3X
9.9X
Healthcare Services
1.4X
1.4X
9.2X
8.6X
HIT & Payer Services
1.4X
1.2X
9.8X
8.8X
Valuation multiples across the
healthcare sector remain strong.
The HIT and CRO sectors receive
the most significant valuation
premiums over the rest of the
market.
HIT INDEX PERFORMANCE DETAIL – 1H 2019
INDEX VALUATION MULTIPLES
HEALTHCARE CAPITAL MARKETS
Copyright© 2019 Healthcare Growth Partners
17
5
Change Healthcare’s shares hit the market on June 27, 2019, marking the end of the Health IT IPO
drought. Following nine IPOs in 2014 (Care.com, IMS, Castlight, Everyday Health, Medical
Transcription Billing, Imprivata, HealthEquity, Connecture, Orion), eight IPOs in 2015 (Inovalon, Press
Ganey, Teladoc, Evolent, Invitae, Fitbit, Mindbody, Adherium) and five IPOs in 2016 (Tabula Rosa,
Oneview, Cotiviti, NantHealth, iRhythm), not a single health IT IPO issued in 2017 or 2018. After two
years of inactivity, all eyes are on the four Health IT companies gearing up to hit the markets along
with Change – Health Catalyst, Peloton, Phreesia, and Livongo.
• The wave of IPOs began with Change Healthcare’s filing at the end of March. The healthcare data
analytics company debuted on the Nasdaq on June 27th and aimed to raise $1.2 billion, though fell
slightly below target with shares trading at $13.94 in the afternoon of its first day. The Company
earned $367 million on revenue of $2.45 billion for the 9-months ended December 31, 2018 and
plans on using the proceeds from the IPO to pay down a portion of its $5.8 billion in debt.
• Health Catalyst, a healthcare data warehousing and analytics company, filed for an IPO in late
April. The Company has raised approximately $391 million and is reportedly planning to raise $150
million to $200mm under the ticker symbol “HCAT” in the Nasdaq.
• Connected fitness bike maker Peloton confidentially filed for their IPO in June. Peloton has raised
almost $1 billion in funding and was most recently valued at $4.15 billion after its latest funding
round. The Company has not yet released the price and number of shares to be offered. Peloton is
reportedly facing a lawsuit over their use of music which is expected to slow their IPO.
• Phreesia, a patient check-in software company, filed its S-1 form with the SEC in late Jun. Per the
filing, the Company is planning on a $125 million public offering under the ticker “PHR” on the
New York Stock Exchange. Phreesia has raised over $100 million and has facilitated more than 54
million patient visits for approximately 50,000 individual providers.
•
In late June, chronic condition management company Livongo Health officially filed for its IPO.
Livongo’s S-1 lists an impressive Q1 revenue of $32.1 million (a 157% increase from $12.5 million
from the same period last year) and early reports suggest the Company is eyeing a $1 billion+
valuation. The Company has raised over $200 million and was most recently valued at $805
million.
HEALTH IT IPOS
HEALTHCARE CAPITAL MARKETS
Copyright© 2019 Healthcare Growth Partners
18
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
Benefitfocus – NAS:BNFT
Care.com – NYS:CRCM
Castlight Health – NYS:CSLT
Cerner – NAS:CERN
Change Healthcare – NAS:CHNG
Computer Programs & Systems – NAS:CPSI
ehealth – NAS:EHTH
Evolent Health – NYS:EVH
Fitbit – NYS:FIT
Health Insurance Innovations – NAS:HIIQ
HealthEquity – NAS:HQY
HealthStream – NAS:HSTM
Hms Holdings – NAS:HMSY
Inovalon Holdings – NAS:INOV
Invitae – NYS:NVTA
IQVIA – NYS:IQV
iRhythm Technologies – NAS:IRTC
Medidata Solutions – NAS:MDSO
MINDBODY – NAS:MB [Acquired 2/15/2019]
Model N – NYS:MODN
NantHealth – NAS:NH
NextGen – NAS:NXGN
NRC Health – NAS:NRC
Omnicell – NAS:OMCL
Premier – NAS:PINC
Roper Technologies – NYS:ROP
Simulations Plus – NAS:SLP
Streamline Health Solutions – NAS:STRM
Tabula Rasa Healthcare – NAS:TRHC
Teladoc – NYS:TDOC
Veeva Systems – NYS:VEEV
Vocera Communications – NYS:VCRA
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
HIT & Payer Services – Constituents
DXC Technology – NYS:DXC
Conduent – NYS:CNDT
Huron Consulting Group – NAS:HURN
CBIZ – NYS:CBZ
Kforce – NAS:KFRC
Navigant Consulting – NYS:NCI
Accenture – NYS:ACN
CACI International – NYS:CACI
Corvel – NAS:CRVL
Tivity Health – NAS:TVTY
Magellan Health – NAS:MGLN
WageWorks – NYS:WAGE
PBMs – Constituents
BioScrip – NAS:BIOS
CVS Health – NYS:CVS
Rite Aid – NYS:RAD
Walgreens Boots Alliance – NAS:WBA
Healthcare Services – Constituents
Amedisys – NAS:AMED
Brookdale Senior Living – NYS:BKD
Civitas Solutions – NYS:CIVI [Acquired 3/8/19]
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
PRA Health Sciences – NAS:PRAH
Syneos Health – NAS:SYNH
Copyright© 2019 Healthcare Growth Partners
19
MACROECONOMICS
6
So far in 2019, stock markets have experienced an incredible rally and completely reversed 2018’s end
of year sell-off to yield the best performance in the first six months of the year in more than two
decades. Much of the return in the first half was generated in Q1 which yielded 13.6% before renewed
trade tensions began to escalate between the United States and China in May. Further, as concerns
over yield curve inversion and tariffs on Chinese goods caused some to hesitate in May, the Dow Jones
Index posted its best return in June since 1955 to end the half up over 17% since the start of the year.
The technology sector led the market rally as it typically does with returns of 26% in the first-half despite
the significant impact of trade tensions with China. Many attribute credit for the rally to the Fed, who
ceased to increase rates in January and indicated that it may choose to cut rates in the second half of
the year.
What is interesting about this rally on Wall Street is the simultaneous negative forces working against it:
we’ve seen noteworthy slowing of global economic growth, rising geopolitical tensions not only between
the United States and China but also in Iran and the Middle East, and Britain repeatedly stumble in its
efforts to exit the European Union. Additionally, rising wages are expected to put pressure on profits in
the coming quarters and corporate debt levels are continuing to creep ever higher as the bull market
stretches into one of the longest in history at over 10 years since the market bottomed out on March 6,
2009.
Q2 2019 saw additional expected earnings decline compared to Q4 2018, with 87 companies issuing
negative earnings guidance out of the 113 S&P 500 companies that issued EPS guidance over the
quarter. The estimated earnings decline for the quarter was -2.6%, coming off of an actual earnings
decline in Q1 of -0.4%. Q1 marked the first year-over-year decline in earnings for the S&P 500 index
since Q2 2016 when earnings declined -3.2%.
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
12/31/2018
3/31/2019
6/30/2019
DJIA
S&P 500
Nasdaq
1H-2019 US STOCK MARKET PERFORMANCE
MACROECONOMICS
Copyright© 2019 Healthcare Growth Partners
20
6
The US IPO market on the whole was relatively flat year-over-year, however was notable for having
some big-name tech IPOs including Uber, Lyft, and Pinterest. According to Ernst and Young, the US
NASDAQ and NYSE saw a total of 88 IPOs raising $32.2 billion in proceeds. This is down approximately
20% in total number of IPOs compared to first-half 2018, and approximately even in terms of total
capital raised compared to that of 2018. Out of the $32.2 billion raised in the US market, a substantial
$19 billion went to tech companies according to the data provider Dealogic.
Worst IPO performers include Uber and Lyft who have both spent significant time trading below their
IPO prices. Best performers include Beyond Meat whose shares are up more than 500 percent as well
as PagerDuty, Zoom Video, and CrowdStrike whose prices have more than doubled from their IPO
prices. Slack notably chose to follow Spotify’s lead from last year and pursue a direct-listing rather than
a more traditional IPO. So far, Slack’s shares have been well-received by the market.
M&A deal activity has been strong thus far in 2019, with a total announced deal value of $1.1 trillion.
This represents a 20% increase from a year ago and the first time U.S. deal value crossed the $1 trillion
mark during the first six months of the year. Notably, the proposed $86 billion merger of United
Technology and Raytheon was the largest deal of the year, followed by Bristol-Myers Squibb’s
acquisition of Celgene and AbbVie’s planned purchase of Allergan.
So far in 2019, the venture industry has enjoyed some well-deserved exits with 34 venture-backed IPOs.
This has relieved liquidity pressure on the industry that had been building up over the past few years
with so many VC-backed companies electing to stay private longer. Venture funds and LPs can now
recognize their gains in these high-profile companies and reinvest the resulting liquidity in new venture
efforts.
NVCA’s Venture Monitor noted two major trends: insatiable market appetite for life sciences businesses,
and positive momentum in investment in female-founded companies. A recent survey conducted by
NVCA and Deloitte found that women comprised 14% of investment partners in the venture industry in
2018, compared with 11% in 2016. While this is still low, it is good to see a positive trend in female
participation in venture capital.
2019 venture capital investment is on pace to match 2018’s record year, with $66 billion deployed
across 4,868 US venture deals in the first half. Of note, the number of rounds with invested capital in
excess of $100 million (“mega-deals”) has exploded, with 208 such deals in 2018 compared to only 36 in
2013. 2019 is on pace to exceed 2018’s record with 123 recorded deals in excess of $100 million.
Overall, 2019 has gotten off to a great start and seems to be keeping pace from a record-setting year in
2018.
Copyright© 2019 Healthcare Growth Partners
21
HEALTH IT HEADLINES
7
Notable headlines from 1H 2019 are outlined in the following pages on a quarterly basis. The
headlines in 1H 2019 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
Walgreens Boots Alliance and Microsoft form digital health link
Walgreens Boots Alliance and Microsoft have entered a seven-year agreement to form a strategic
partnership to build digital healthcare solutions. The companies say they are joining forces to develop
new healthcare delivery models, technology and retail innovations. The intent is to combine
Microsoft’s Azure cloud and AI platform—as well as its ability to make healthcare investments and
retail solutions—with Walgreens’ customer reach, retail pharmacy locations, outpatient services and
industry expertise.
Aetna, other health insurers team up with IBM on blockchain project
A group of health insurers is collaborating with IBM to develop a blockchain network to process
claims and payments, maintain directories, and improve administrative efficiency and cost
management in the industry. Anthem, Health Care Service Corp., CVS Health's Aetna and PNC Bank
are all involved in the network.
In bold new proposal, Trump administration pitches an end to certain drug rebates
The Trump administration on Thursday put forth a long-awaited proposal to eliminate certain rebates
drug makers pay insurance companies in Medicare, a move it says will ultimately lower prescription
drug prices — and one that stands to upend the complicated structure for how drugs are priced in
the U.S.
Greenway to Pay $57.25M for False EHR Certification Allegations
Greenway Health LLC has agreed to pay $57.25 million to resolve complaints that its “Prime Suite”
EHR product caused users to submit false information to the EHR Incentive Programs. The federal
government has also accused the company of falsely obtaining 2014 Edition Certified EHR Technology
(CEHRT) status. The allegations claimed that Greenway misrepresented the capabilities of its product
to customers and provided unlawful remuneration to users for positive recommendations to peers,
violating the Anti-Kickback Statute.
CVS unveils HealthHub store design
CVS Health has unveiled three redesigned health-focused concept stores in the Houston market. The
pilot stores, called HealthHubs, have space for services to help customers manage such chronic
conditions as diabetes, hypertension and asthma. Each store also has an expanded health clinic with a
lab for blood testing and health screenings. The stores will have respiratory specialists and dietitians
on staff. Beyond those services, there are also wellness rooms equipped to handle yoga classes and
seminars. The stores, part of the company's vision in acquiring health insurer Aetna, are designed to
help the pharmacy chain become more of a convenient healthcare provider.
HEALTH IT HEADLINES
Copyright© 2019 Healthcare Growth Partners
22
7
Q2 HEADLINES
HHS unwraps long-awaited new information blocking rule
The rule issued by the Office of the National Coordinator for Health Information Technology involves
the patient, not as a person being “acted upon,” said Elise Sweeney Anthony, director of Office of
Policy for the ONC, but as someone in control of his or her electronic health records.
If a patient
requests their record, and it’s not given to them electronically and for free, that’s information
blocking, Sweeney said during HIMSS19. The Centers for Medicare and Medicaid Services would also
require that healthcare providers and plans implement open data sharing technologies to support
transitions of care as patients move between these plan types. For instance, the records must be
able to be transferred between providers when a patient requests that service when changing
physicians.
HHS unveils new payment model for ambulance service providers
HHS unveiled a payment model that will reimburse ambulance services for transporting patients to
facilities such as urgent care centers or physician's offices instead of emergency departments, as well
as enabling them to work with a health care provider to use telemedicine for onsite care. The model,
called Emergency Triage, Treat and Transport, or ET3, is designed to reduce unnecessary
hospitalizations and is expected to run for five years starting next year.
The end for Obamacare? Trump administration says it will ask a court to throw out entire law
The Justice Department won’t dispute a federal court’s decision that the Affordable Care Act is
unconstitutional and should therefore be eliminated in its entirety. This two-sentence announcement
represents a position shift from earlier arguments in which the Trump administration advocated
striking down only certain of ACA’s consumer protections, such as the requirement that insurers
cover pre-existing conditions. A group of Republican governors sued the federal government after
Congress eliminated the penalty for not buying health insurance, arguing that the decision renders
the entire ACA unconstitutional, a position with which the federal government now agrees.
Centene to purchase WellCare in $17.3B deal
Centene Corporation will purchase rival insurer WellCare Health Plans in a deal valued at $17.3
billion, the companies announced early Wednesday. The acquisition has been unanimously approved
by both boards, according to the announcement. Should the deal be finalized, the joint company
would include 22 million members across all 50 states and combined estimated revenue of $97 billion
in 2019. The deal will create one of the largest sponsors of government plans across the three main
markets: Medicare, Medicaid and the Affordable Care Act exchanges, the insurers said on a call with
investors Wednesday morning. Post-merger, the joint company would be the nation's biggest sponsor
of Medicaid managed care and exchange plans, and the fourth-largest payer in the private Medicare
space, including Medicare Advantage, supplemental coverage and Part D plans.
CMS expands Medicare Advantage coverage of telehealth services
As part of efforts by CMS to increase technological innovation and boost competition among
Medicare Advantage plans, the agency is moving to expand the range of beneficiaries eligible for
telemedicine benefits. The new rule, which will go into effect in the 2020 plan year, will allow
Medicare Advantage to offer telehealth services as part of their basic benefits package, providing
patients more options to receive healthcare services from locations like their home.
HEALTH IT HEADLINES
Copyright© 2019 Healthcare Growth Partners
23
7
Amazon adds HIPAA compliance to Alexa Skills, opening door for secure health apps
Amazon’s Alexa voice assistant has a new trick: transmitting secure patient information between
patients and caregivers. Developers can now use the Alexa Skills Kit to build HIPAA-compliant apps,
opening the door for hospitals, insurers, digital health startups and others to manage patient data
through voice.
CMS to launch new direct-contracting pay models in 2020
HHS Secretary Alex Azar announced a new initiative to transition primary care practices from fee-for-
service payments to a voluntary, value-based model. The CMS Primary Cares Initiative, which will be
piloted next year, will offer providers five payment models under two paths that focus on chronically
and seriously ill beneficiaries.
HHS to cap HIPAA fines based on 'culpability’
HHS updated the maximum it will penalize providers, health plans and their business associates in the
wake of HIPAA violations, in some cases dropping the upper limit by more than $1 million. The new
system sets annual limits for these fines based on the organization's "level of culpability" associated
with the HIPAA violation, according to the department's notice of enforcement discretion. That
means organizations that have taken measures to meet HIPAA's requirements will face a much
smaller maximum penalty than those who are found neglectful.
Trump slams drug makers, vows to let U.S. states buy cheaper medicines abroad
The Trump administration announced they are working to allow U.S. states to buy prescription drugs
from other countries if the medications cost less. "We will allow them, with certain permissions, to go
to other countries if they can buy them for 40, 50, 60 percent less," Trump said at a White House
event on hospital billing.
HHS White House Wants Patients to Know Health-Care Prices Up Front
The Trump administration has been working behind the scenes for months on a strategy to force
greater price disclosure across much of the $3.5 trillion health-care industry. The Administration
wants to require up-front disclosure of prices patients will pay for treatment as well as rates insurers
negotiate with providers.
House Hearing Outlines Competing Solutions to Surprise Medical Bills
Legislation to address surprise medical bills must center on the patient, protecting patients from
having to take part in mitigating extraordinarily high medical bills. Such was the conclusion of a House
Ways and Means Committee hearing on the matter, although little other consensus was reached.
Change Healthcare's shares debut on the NASDAQ
A new ticker symbol is now trading on the Nasdaq: CHNG. The Nashville, Tennessee health tech
company sold its shares to the public at the IPO price of $13 a share raising nearly $800 million and
celebrated its market debut by ringing the closing bell at the Nasdaq Market Site.
U.S. federal court delays adoption of healthcare rule on abortion
The U.S. Department of Health and Human Services (HHS) and its opponents in a California lawsuit
agreed on Friday to delay implementing a rule that would allow medical workers to decline
performing abortions or other treatments on moral or religious grounds, according to a federal court
filing.
Copyright© 2019 Healthcare Growth Partners
24
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 100 health
IT transactions representing over $2 billion in value since 2007.
Our passion for healthcare inspires us to not only create value for our clients, but to also generate
broad, overarching improvements to the functionality and sustainability of health. With our focus, we
deliver knowledgeable, honest and customized guidance to select clients looking to execute high
value health IT, health information services, and digital health transactions.
CONTACT INFORMATION
Christopher McCord
Managing Director
chris@hgp.com
2001 Kirby Drive, Suite 814
Houston, TX 77019
(713) 955-7935
www.hgp.com
Securities offered through HGP Securities, LLC, member FINRA & SIPC, broker-dealer affiliate of Healthcare
Growth Partners, LLC.
Sources of Information:
CMS, CNBC, company press releases, company SEC filings, Dealogic, Ernst and Young, FactSet, FierceHealthcare,
Health Data Management, Healthcare Growth Partners database, HealthLeaders Media, HIStalk, Mercom
Capital Group, Modern Healthcare, The New York Times, Mergermarket, NVCA, Pitchbook, Rock Health, StartUp
Health, and The Wall Street Journal.
These statistics are presented for informational purposes only. While the information presented has been
obtained from sources deemed to be reliable, no representation or warranty, express or implied, is made as to
the accuracy or completeness of such information.
Copyright© 2019 Healthcare Growth Partners
25
HGP TRANSACTION EXPERIENCE
9
HGP TRANSACTION EXPERIENCE
Copyright© 2019 Healthcare Growth Partners
26
9
HGP TRANSACTION EXPERIENCE
Copyright© 2019 Healthcare Growth Partners
27
9
Copyright© 2019 Healthcare Growth Partners
28
APPENDIX A
Strategic M&A Highlights
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
AMN
Healthcare
Services
Silversheet
Provider of a healthcare credentialing platform intended to help healthcare
facilities and medical professionals connect and work together more
efficiently.
na
Q1
Medsphere
Systems
HealthLine
Solutions
Provider of Healthcare inventory and supply chain management services.
na
Q1
Healthgrades
Influence Health
A comprehensive consumer-centric patient engagement and healthcare
collaboration portal.
na
Q1
Cisive
PreCheck
Provider of background investigation services including healthcare
background screening, credentialing and program integrity.
na
Q1
Everyday Health
Castle Connolly
Top Doctors
Provider of a medical platform designed to help patients find information
regarding physicians, hospitals, and medical care centers.
na
Q1
WEX
Discovery Benefits
Provider of employee benefits administration services. The company's
products include health savings accounts, flexible spending accounts,
health reimbursement arrangements, commuter benefits, and other tax
advantage accounts.
$425
Q1
NexTech
Systems
SRS Health
Provider of electronic health record technology and services to the
healthcare industry.
na
Q1
BioTelemetry
Geneva Health
Solutions
Developer of remote monitoring platform designed to facilitate remote
cardiac patient care and monitoring.
$65
Q1
Connect
America
Tunstall Americas
Provider of remote health monitoring and response solutions. The
company's integrated care platform offers a suite of remote patient
monitoring software.
na
Q1
eMDs
Aprima Medical
Software
Provider of electronic health record, practice management, and revenue
cycle management solutions for medical practices.
na
Q1
Livongo Health
myStrength
Provider of mobile and web-based behavioral health solutions for prevalent
health conditions that include depression, anxiety, stress, substance use
disorder, chronic pain, and sleep disorders.
$10
Q1
PerfectServe
Lightning Bolt
Solutions
Developer of an artificial intelligence optimized physician shift scheduling
technology.
na
Q1
N. Harris
Computer
Corporation
Collain Healthcare
Provider of electronic health record, virtual care, and interoperability
solutions for the long-term and post-acute care industry.
na
Q1
symplr
API Healthcare
Corporation
Developer of a labor resource management software intended for
healthcare organizations.
$300
Q1
WellSky
Health Care
Software
Provider of clinical and financial software for long-term care settings.
na
Q1
Medsphere
Systems
Corporation
Wellsoft
Developer and provider of information management software for the
Emergency Department.
na
Q1
Tabula Rasa
Healthcare
PrescribeWellness
Developer of a cloud-based patient relationship management software
designed to collect data for pharmacies.
$150
Q1
AbleTo
Joyable
Developer of a digital mental therapy platform intended to treat anxiety
and depression.
na
Q1
Hill-Rom
Voalte
Developer of hospital point-of-care communications software technology
designed to answer any type of healthcare communication challenges.
$195
APPENDIX A – M&A HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
29
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Signify Health
TAVHealth
Developer of a collaboration platform that provides a unique privacy
architecture, enabling community and healthcare partners to collaborate,
coordinate services, keep track of patients and create longitudinal social
records together.
na
Q1
Philips
Direct Radiology
Teleradiology practice comprising more than 70 radiologists and 60 support
staff working in close partnership with 300+ facilities across the country.
na
Q2
Practice
Velocity
DocuTAP
Developer of healthcare software which fully integrates practice
management and EMR functionality and offers valuable interface and health
information exchange capabilities in order to connect patient data with
other software systems.
na
Q2
EverCommerce CollaborateMD
Provider of a practice management and medical billing software intended to
digitize medical practices, process medical claims, manage health data,
speed up and secure the payment cycle.
na
Q2
HealthEquity
WageWorks
Operates as an on-demand provider of tax-advantaged programs for
consumer-directed health, commuter, and other employee spending
account benefits.
$2,010
Q2
CPSI
Get Real Health
Provider of patient engagement and care management solutions to
healthcare organizations worldwide.
$11
Q2
Cardinal Health
mscripts
Provider of a mobile pharmacy and digital patient engagement platform
designed to offer innovative, easy-to-use mobile and web health
management services.
na
Q2
Netsmart
Technologies
McBee
Associates
Operator of a health care-focused consulting firm. The company is focused
on providing outsourced nurse chart review, billing, cash collection, revenue
cycle turnaround, data mining and analysis, and other ancillary outsourced
services to acute and post-acute providers.
na
Q2
N. Harris
Computer
Corporation
Uniphy Health
Offers clinical communications and collaboration, physician engagement,
patient engagement, high risk patient management, and health assessment
solutions.
na
Q2
Datix
iContracts
Provides contract management solutions for pharmaceutical and life
sciences industries.
$210
Q2
Remedy Health
Media
Vertical Health
Publisher serving patients and healthcare professionals in the diabetes,
mental health, back pain, and pain management areas.
na
Q2
JPMorgan Chase
InstaMed
Provider of a payments network designed to connect providers, payers and
consumers on one platform.
$600
Q2
Apple
Tueo Health
Developer of a system to helps parents monitor asthma symptoms in
sleeping children.
na
Q2
Best Buy
Critical Signal
Technologies
Provider of personal emergency response systems to healthcare industry.
na
Q2
Beckman
Coulter
Cytobank
Provider of a storage and analysis platform designed to accelerate research
productivity. The company's platform manages, analyzes, and enables the
sharing of high dimensional single cell biological data.
na
Q2
Waystar
PARO
Provider of a financial assistance predictive analytics solution.
na
Q2
Health
Insurance
Innovations
TogetherHealth
Operator of a prescription assistance company for individuals who need
help affording their medications. The company's direct-to-consumer
platform connects individuals with U.S. insurance carriers using consumer
acquisition and engagement to primarily serve the over 65 age group
insurance market.
$50
Q2
Dassault
Systemes SA
Medidata
Solutions
Provider of cloud-based solutions for the clinical development programs of
life sciences companies.
$5,800
Q2
Allscripts
Healthcare
Solutions
ZappRx
Developer of a prescription management system that allows healthcare
providers, patients, and pharmacists to interact and communicate.
na
APPENDIX A – M&A HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
30
10
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
eSolutions
Practice Insight
Provider of SaaS claims management tools to healthcare providers.
na
Q2
McKesson
Metabolic
Healthcare (dba
Echo)
Provider of a medical platform intended to make medication management
easier. The company's platform offers an application to add, order, take and
reorder medications.
na
Q2
UnitedHealth
Group
Equian (Aeneas
Buyer Corp.)
Provider of healthcare reimbursement analysis and payment integrity
solutions for healthcare, workers' compensation, and property and casualty
industries in the United States and internationally.
$3,200
Q2
UnitedHealth
Group
PatientsLikeMe
Provider of a clinical research platform designed to provide real-time insight
into thousands of diseases and conditions. The company's platform is a
health information sharing website for patients to share both personal
stories and health data about the conditions.
na
Q2
Net Health
Systems
Optima
Healthcare
Solutions
Developer of therapy management software intended for post-acute care
providers.
na
Copyright© 2019 Healthcare Growth Partners
31
APPENDIX B
Financial Sponsor Buyout Highlights
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Health
Enterprise
Partners, Health
Velocity Capital,
JMI Equity
Jvion
Developer of a software designed to predict and prevent patient-level
disease and financial losses. The company's software application uses Eigen
Sphere engine to deliver a comprehensive patient view amplified beyond
the risk of an event to the clinical actions that will improve outcomes and
drive engagement.
na
Q1
Spectrum
Equity, Health
Enterprise
Partners
Payer Compass
Provider of healthcare reimbursement solutions. The company's core
software platform helps to manage complex healthcare reimbursement
and pricing strategies.
na
Q1
Kriya Capital
Receivable
Solutions
Specialist
Provider of technology, consulting, onsite staffing and outsourcing services
to improve the financial success of your enterprise.
na
Q1
Arsenal Capital
Partners
Accumen
Provider of clinical laboratory services for hospitals and health systems. The
company offers consulting on strategic growth and execution, utilization
enhancements and performance measurement.
na
Q1 Morgan Stanley Clarity Software Developer of document management solutions for the healthcare industry.
na
Q1
Investcorp
Health Plus
Management
Provider of physician practice management services for outsourcing non-
medical functions.
na
Q1
Investcorp
Cambio
Healthcare
Systems
Provider of healthcare information and management systems focused on
providing electronic health services with the help of skilled and
experienced consultants.
na
Q1
ABRY Partners
Sermo
Offers an online network for physicians to collaborate on cases and
exchange observations to improve patient care, discuss drugs and devices,
and share information on new therapies and innovations.
na
Q1
Francisco
Partners
Management
CapsuleTech
Provider of services for medical device integration. The company integrates
with clinical information systems to capture more data, reduce manual
efforts and cost, and improve patient care.
na
Q1
Beecken Petty
OKeefe &
Company
Health-E
Commerce
Parent company of pre-tax health and wellness shopping sites.
na
Q1
Frazier
Healthcare
Ventures
Comprehensive
Pharmacy
Services
Provider of pharmacy support services including inpatient pharmacy
management, telepharmacy, consulting, and outpatient pharmacy
management.
na
Q1
ABRY Partners
Anju Software
Developer of integrated life sciences software platform for pharma,
biotech, medical device, and contract research organization (CRO)
companies.
na
Q1
Aldrich Capital
Partners
eHealth
Technologies
Provider of medical record retrieval and organization services and image-
enabled HIEs.
$41
Q1
EMV Capital
Wanda
Developer of a cloud-based remote patient monitoring platform that
features proactive care management to deliver insights on pending adverse
events to the point of care in real-time.
na
Q1
Primus Capital
Harmony
Healthcare IT
Developer of HealthData Archiver, a healthcare information technology
that extracts demographic, financial, clinical and administrative data from
healthcare systems.
na
Q1
LLR Partners
CareATC
Developer of a health management platform intended to offer more
accurate, relevant, and actionable employee health data.
na
APPENDIX B – BUYOUT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
32
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Vista Equity
Partners
PlanSource Benefits
Administration
Provider of a platform that automates various benefit transactions and
connects with insurance carriers.
na
Q1
Frontier Capital
Clearwave
Corporation
Developer of healthcare authentication network software. The company's
software has features such as digital check-in, insurance eligibility and
patient payments.
na
Q2
Blue Sea
Capital, Five
Points Capital
SignatureMD
Provider of practice management services based on a concierge medicine
model.
na
Q2
H.I.G Growth
Partners
Jenny Craig
Provider of weight management programs designed to help members
lose weight.
na
Q2
Gemspring
Capital
Valant Medical
Solutions
Developer of a web-based EMR system with integrated practice
management that enables psychiatrists and other behavioral health
professionals to manage billing and maintain electronic medical records.
na
Q2
H.I.G Growth
Partners
Medusind Solutions
Provider of revenue cycle management technology and services.
na
Q2
Activa Capital
Medisys (France)
Provider of software to maintain better information sharing and
coordination between services that primarily focus in the medico-social
sector, home-care field and intervention planning for daycare, institutions
for the disabled or dependent elderly people, and health homes.
na
Q2
The Riverside
Company
HemaTerra
Developer of software used for collection and integration of blood,
plasma, platelets and other biologics.
na
Q2
M3
DailyRounds
Developer of a medical education platform designed to focus on a case-
based and problem-solving approach to learning. The company's platform
allows doctors to see, share, review and learn clinical cases.
na
Q2
Bow River
Capital
AbsenceSoft
Provider of software solutions for employers to manage FMLA, disability,
ADA, and other forms of absence leave.
na
Q2
Audax Group
The Chartis Group
Operator of a comprehensive advisory and analytics services company.
Through expertise in strategic planning, performance excellence,
informatics, and health analytics, the company enables academic medical
centers, integrated delivery networks, children's hospitals, and healthcare
service organizations to achieve transformative results.
$247.5
Q2
Great Point
Partners
Axiom Real-time
Metrics
Developer of e-Clinical trial software. The company's e-Clinical suite
delivers a powerful range of end-user focused, unified functionality and
modules for clinical study data and operational needs.
na
Q2
Littlejohn & Co
Contextmedia
Health (Outcome
Health)
Provider of a platform that offers exam room technologies that engage
patients and caregivers as they wait to see their provider.
na
Q2
AnaCap
Financial
Partners
SundhedsGruppen
Provider of health insurance and claims management services to
businesses.
na
Q2
The Riverside
Company
Naturally Slim
Operator of a digital health platform intended to provide health and
lifestyle improvement services.
na
Q2
WindRose
Health Investors
Healthmap
Solutions
Provider of clinical and data analytics services. The company's offerings
include medical cost management, quality reporting, risk adjustment, and
revenue optimization.
$85
Q2
Verdane Capital Komplett Apotek
Operator of a full-service online pharmacy, based in Norway.
na
Q2
Thoma Bravo
Cority
Developer of an environmental, health and safety (EHS) software
designed to measure environmental impact and mitigate workplace
injuries and illnesses.
na
APPENDIX B – BUYOUT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
33
11
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Golden Gate
Capital
Ensemble Health
Partners
Provider of revenue cycle management and consulting services.
na
Q2
New Mountain
Capital
W2O Group
Provider of marketing communications services specializing in analytics
and market research driven public relations communications, and digital
and social media services to a blue-chip client roster.
na
Q2
HIG Capital,
Goldman Sachs
MedPro Advantage
Provider of medical management services. The company provides
medical billing & insurance, operations support, lab support and coding &
training services to dermatology clinics, plastic surgery practices, spas,
and surgical centers in Illinois and Iowa.
na
Q2
Ares Capital
Management,
Leonard Green
& Partners
Press Ganey
Associates
Provider of strategic advisory services for healthcare organizations. The
company is a provider of patient-experience measurement, performance
analytics and strategic advisory services for health care organizations
across the continuum of care.
$4,200
Q2
Nordic Capital
Aris Global
Provider of cloud-based software solutions for Pharmacovigilance & Drug
Safety, Clinical Development, Regulatory, and Medical Affairs.
$800
Q2
Thomas H. Lee
Partners
NexTech Systems
Develops medical practice management, marketing, and electronic
medical records (EMR) software for plastic surgeons, dermatologists,
medical spas, refractive surgeons, gastroenterologists, urologists, and
bariatric surgeons
$500
Q2
Pamlico Capital Digitech Computer
The company's services include billing software, compliance support, and
integration services, enabling EMS providers to modernize their billing
and maximize collections from their clients.
na
Q2
The Jordan
Company
Vyne
Operator of a healthcare information exchange platform intended for
secure transmission, presentation, and storage of medical documents and
management of healthcare communication.
na
Copyright© 2019 Healthcare Growth Partners
34
APPENDIX C
Private Equity Highlights (non-buyout)
12
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Silver Lake
Verily Life
Sciences
Developer of tools and platforms designed to better understand
ways to predict and prevent disease onset and progression.
$1,000
Q1
General Catalyst Partners
Mindstrong
Health
Developer of innovative preemptive brain healthcare designed to
improve clinical outcomes and reduce hospital visits.
$45
Q1
Oak HC/FT Partners
WithMe
Developer of a pharmacy benefit platform intended to provide
medication guidance solutions.
$20
Q1
Alychlo NV, Balderton Capital,
IDInvest Partners, Generation
Investment Management
Sophia
Genetics
Developer of a clinical genomics analysis platform designed to
perform routine diagnostic testing. The company's clinical
genomics analysis platform combines genomics, machine
learning, and clinical diagnostics.
$77
Q1
EDBI, Blue Water Life Science
Fund, Bridge Builders
Collaborative, Jazz Venture
Partners, 5AM Venture
Management, TrustBridge
Partners, Novartis, Temasek
Holdings, Arboretum Ventures
Pear
Therapeutics
Developer of a software-based digital therapeutics platform
designed to treat disease and enhance the efficacy of
pharmaceuticals.
$64
Q1
JK&B Capital, Pitango Venture
Capital, Hotung Capital, Argos
Capital, Israel Innovation
Fund, BlueRed Capital, Wells
Fargo & Company, Hill-Rom
EarlySense
Developer of patient monitoring systems that provide continuous
patient monitoring for heart rate, respiratory rate, and motion,
enabling clinicians to manage early detection of patient
deterioration and to verify timely responses and protocol
compliance.
$39
Q1
Merck GHIF, TT Capital
Partners
Clinithink
Provider of clinical data insights designed to transform existing
unstructured clinical narrative into structured data.
na
Q1
CLP Fund, CDH Investments
Medbanks
Provider of a medical database intended to offer oncology related
information.
$59
Q1
Ascension Ventures, Echo
Health Ventures, Town Hall
Ventures, New Enterprise
Associates
Strive Health
Developer of care delivery models designed to improve chronic
kidney disease care. The company's offerings include leveraging
comparative and predictive data and analytics to identify patients
at risk.
na
Q1
Section 32, Verily Life
Sciences, Andre
Ciitizen
Developer of a platform created to help patients securely collect
and share their personal health data.
$17
Q1
Launchpad Digital Health,
Principal Life, AXA Venture
Partners, MassMutual
Ventures, Aflac Corporate
Ventures, Transamerica
Ventures, Wells Fargo &
Company, Wanxiang
Healthcare Investments
Limelight
Health
Provider of cloud-based enterprise software designed to re-
imagine the employee benefits quoting experience. The
company's software offers a range of microservices that are
highly configurable for business needs including quoting, rating,
proposal generation, renewals, automated processing for pre-
sales, underwriting, enrollment support, and data analysis.
$33.5
Q1
ACME Investments, Shasta
Ventures, VMG, GV, Base10
The Pill Club
Provider of a telemedicine service designed to simplify the
process of getting birth control, from prescription to delivery.
$51
Q1
Undisclosed
Hims
Provider of wellness products intended to offer hair loss
prevention medicines for men.
$100
Q1
SoftBank Capital, Tiger Global
Management, Shenzhen
Cowin Venture Capital
MobileMD
Provider of cloud-based mobile technology-based products that
help in software design, production, implementation, and
consultation.
$80
Q1
Greenoaks Capital Partners
Clover Health
Operator of a Preferred Provider Organization (PPO) intended to
improve the quality of life for members and physicians.
$500
APPENDIX C – INVESTMENT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
35
12
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
RTI International
SPH Analytics
Provider of quality management services. The Company connects
and integrates claims and clinical data, analytics, and consulting
to deliver a comprehensive perspective on the dynamics that
drive business in the payer and provider markets.
na
Q1
MPM Capital, Merck GHIF,
ITOCHU Technology Ventures,
ITOCHU Corporation, Mitsui &
Co., Deerfield Management
Company, F2 Ventures
TriNetx
Operator of a global health research network intended to
optimize clinical trial design and recruitment processes.
$40
Q1
Flare Capital Partners, Amgen
Ventures, Horizon Healthcare
Services, McKesson, Sanofi
Ventures, New Enterprise
Associates, UCB, Lakestar
Advisors
Aetion
Provider of analytics and essential evidence to support value-
based healthcare. Serves payers, biopharma, and medical device
customers.
$27
Q1
Flexpoint Ford, Ballast Point
Ventures
Yprime
Developer of digital analytics applications to advance critical data
functions for clinical research. The company offers patient data
collection, clinical supplies, patient management, real-time
reporting, and document management applications, as well as
related consulting services.
na
Q1
Insight Venture Partners, CAA
Ventures, TPG Growth, Sound
Ventures
Calm.com
Provider of a relaxation therapy application designed to reduce
anxiety, sleep better and feel happier.
$88
Q1
Varsity Healthcare Partners,
BlueCross BlueShield Venture
Partners
Ideal Option
Provider of addiction treatment programs including addiction
medicine and counseling, behavioral therapies, and other related
educational services, enabling customers to get out of opioids
overdoses.
na
Q1
TPG Biotech, Innovatus Capital
Partners, Claremont Creek
Ventures, Foresite Capital
Management, GV, WuXi
NextCODE
DNAnexus
Developer of a biomedical informatics and data management
platform designed to analyze DNA-sequencing data.
$68
Q1
Amazon
Hatch Baby
Developer of smart wireless parenting devices designed to
coordinate with your child's bedroom, enabling parents to get
insight into their babies' growth and health overtime.
na
Q1
Sequoia Capital, Norwest
Venture Partners, Sands
Capital Management, UPMC
Enterprises, Kaiser
Permanente Ventures,
OrbiMed
Health
Catalyst
Developer of a healthcare data warehousing and analytics
platform intended for massive and sustained healthcare
improvements. The company's platform improves geriatric care,
diabetes self-management, and risk-stratified care management.
$100
Q1
DST Global, Index Ventures
Alan (Life and
Health
Insurance)
Provider of an online digital insurance platform designed to
provide health insurances. The company's platform offers simple,
seamless coverage with reimbursements.
$47.2
Q1
Undisclosed
Roman Health
Medical
Provider of a cloud pharmacy for erectile dysfunction, handling
everything from online diagnosis to prescription delivery.
$85
Q1
Korea Investment Partners,
Singtel Innov8, UOB Venture
Management, WuXi AppTec
HaloDoc
Developer of an online medical consultation platform designed to
help people to keep a check on health.
$65
Q1
Aetna
MAP Health
Management
Provider of a cloud based behavioral health population
management platform intended to improve outcomes for
patients treated for addictions and other behavioral health
illnesses.
$25
APPENDIX C – INVESTMENT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
36
12
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
K1 Capital
Digital
Pharmacist
Operates as a digital health company that powers the digital
communication, connectivity, and adherence solutions for
pharmacies, national pharmacy wholesalers, hospitals systems,
and pharmaceutical brands.
$125
Q1
Bessemer Venture Partners,
Rose Park Advisors, Hearst
Health Ventures, F-Prime
Capital Partners, Maverick
Ventures
Artemis
Health Inc.
Developer of a healthcare analytics platform designed to
optimize benefit programs and minimize spending.
$25
Q1
Omidyar Network, Define
Ventures, Oak HC/FT Partners,
Scout Ventures, New York
Ventures, Town Hall Ventures
Unite Us
Developer of a SaaS platform designed to build coordinated care
networks for connecting health and social service providers
together.
$35
Q1
Individual Investors, New
Enterprise Associates
Instacare
Group (dba
Cleo, fka
LUCY)
Provider of an online family support platform designed to build
trust and connection with families, guiding them on their
journeys through life as parents.
$27.5
Q1
Perceptive Advisors
Saama
Technologies
Provider of a unified AI-enabled clinical data analytics platform
designed to help pharmaceutical and biotechnology companies to
access previously unattainable, enterprise-level views of the raw
data across their disparate business silos.
$40
Q1
Tencent Holdings, IDG Capital
Partners, Gaorong Capital
Shuidichou
Operator of a crowdfunding platform intended to serve the
healthcare sector in China. The company's platform offers to raise
fund for the treatment and other healthcare services.
$74
Q2
Undisclosed
Cardinal
Analytx
Provider of healthcare analytical services intended to predict
healthcare spending by leveraging machine learning.
$22
Q2
BVC, Town Hall Ventures,
StartUp Health, Sidewalk Labs,
Redpoint Ventures, Thrive
Capital, Maverick Ventures,
EmblemHealth, Echo Health
Ventures
Cityblock
Health
Developer of healthcare technology solutions that enable low-
income urban residents to get personalized care, including
preventative visits, mental health coverage, and access to
appropriate social service programs.
$65
Q2
General Catalyst Partners,
General Atlantic
PathAI
Developer of artificial intelligence technology for pathology. The
platform provides end-to-end data-driven pathology analysis and
standardized pathologic diagnoses.
$60
Q2
Square Peg Capital, TLV
Partners, Magma Venture
Partners, Emerge
Aidoc
(formerly
TailorMed)
Provider of an artificial intelligence (AI) medical imaging platform
intended to analyze medical scans easily.
$27
Q2
Intermountain Ventures, .406
Ventures, Battery Ventures,
RRE Ventures
Redox
Provider of an information technology platform designed to
eradicate technical barriers in healthcare systems.
$33
Q2
Khosla Ventures, Physician
Partners, Hembrecht
Healthcare Growth Venture
Fund, Bold Capital Partners
Viome
Provider of wellness as a service intended to help people track
their microbiome health.
$25
Q2
NEC Corporation
BostonGene
Developer of biomedical software designed for advanced patient
analysis and personalized therapy.
$50
Q2
Country Garden Holdings,
Tencent Holdings, Sequoia
Capital
Tencent
Trusted
Doctors
Provider of health management services for individuals and
families. The company combines traditional medical service and
advanced Internet technology, linking health data on online
platforms and making a multidimensional analysis of patient's
physical status.
$250
APPENDIX C – INVESTMENT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
37
12
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Highland Capital Partners,
Goodwater Capital, NextG,
Next Coast Ventures, SoGal
Ventures
EverlyWell
Provider of a next-generation laboratory testing platform
designed to empower people to have access to their own
personalized health and wellness information.
$50
Q2
Colorado Impact Fund, Drive
Capital
CirrusMD
Provider of a platform which facilitates patients to send secure
messages and images, schedule a video chat, access health
information, and gain 24/7 access to local doctors.
$15
Q2
Red Badge Management and
Undisclosed Investors
CareCloud
Provider of cloud-based software and services for medical
offices management.
$33.2
Q2
Accel-KKR
OrthoFi
Developer of a software and technology platform designed to
aid orthodontists in acquiring, financing and managing new
patients, flexible financing options, insurance eligibility checks
and claims submissions.
na
Q2
Aglae Ventures, Sequoia
Capital, Samsung Ventures
Noom
Developer of mobile health coaching software designed to
provide intelligent nutrition and exercise coaching.
$58
Q2
Piper Jaffray, Noro-Moseley
Partners, Hatteras Venture
Partners, Shumway Capital
Elligo Health
Research
Provider of a clinical research platform intended to
revolutionize the clinical research industry with a novel
approach to common trial challenges including patient
participation, enrollment, and physician participation.
$20
Q2
IDG Ventures India, IDG
Ventures, Pratithi Investment
Trust, Accel Management,
Anand Piramal Trust, Kalaari
Capital
CureFit
Developer of a fitness based online platform created to address
preventative healthcare techniques.
$120
Q2
Hanwha Asset Management,
Greenspring Associates,
Andreessen Horowitz,
Aquiline Capital Partners
Health IQ
Provider of a health insurance platform designed to offer lower
rates for health-conscious people such as cyclists, runners, and
vegans.
$55
Q2
Questa Capital Management,
Alta Partners, Echo Health
Ventures
DispatchHealth
Provider of on-demand mobile and virtual healthcare services
intended to offer definitive and quality care.
$33
Q2
Centene, GV, Polaris Partners,
Oak HC/FT, F-Prime Capital
Quartet Health
Provider of a cloud based behavioral healthcare platform
designed to enable every person to thrive by building a
collaborative mental and physical health ecosystem.
$60
Q2
Undisclosed
Jawbone
Health
Provider of proprietary wearable technology with clinically
relevant signals that will connect patients and physicians based
on data-driven dialogue, enabling individuals to catch lifestyle
diseases early and manage these new conditions as well as pre-
existing ones.
$65.4
Q2
One Peak Partners, Goldman
Sachs, Piton Capital, Enern
DocPlanner
Developer of a medical appointment scheduling platform
designed to improve patient flow and help digitize healthcare
practices.
$93.2
Q2
HCSC Ventures, SJF Ventures,
Adams Street Partners, Blue
Cross and Blue Shield
Association
Solera
(Healthcare
Ecosystem)
Provider of integrated chronic disease prevention services
intended to connect patients, payers, and physicians with
community organizations and digital therapeutics providers
simply and securely.
$42
Q2
Silversmith Capital Partners,
Leerink Transformation
Partners
BHE Health
Analytics
Provider of software and custom research solutions for life
science companies looking to answer the toughest healthcare
questions.
$78
Q2
GreatPoint Ventures,
CrossLink Capital, Uncork
Ventures, Tarsadia
Investments
Phil
Provider of a prescription refill service aimed at recurring
prescriptions.
$25
APPENDIX C – INVESTMENT HIGHLIGHTS
Copyright© 2019 Healthcare Growth Partners
38
12
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Westview Capital Partners
Health
Monitor
Network
Developer of a marketing platform designed to facilitate dialogue
between patients and their healthcare professionals.
na
Q2
Goldman Sachs, Design to
Improve Life Fund, GV, Toyota
Tsusho, Oakhouse Partners,
Katalyst Ventures, The Rise
Fund, Temasek Holdings,
Bright Success Capital
Zipline
International
Inc.
Builds drones and runs delivery services, dropping crucial medical
supplies to clinics or hospitals in areas that aren't accessible by
land.
$190
Q2
Hanaco Ventures, Qumra
Capital, Norwest Venture
Partners, Compound, Spark
Capital Partners, Nomura
Capital Partners, Revolution
Health Group
Talkspace
Operator of an online platform that connects users and therapists
for one-on-one discussions, chats, and video interfaces.
$50
Q2
Georgian Partners, Drive
Capital
Beam Dental
Provider of group dental insurance and smartphone-connected
toothbrushes that are designed to collect data about a user's
daily hygiene and use it to determine the rate of insurance plans.
$50
Q2
Novo Holdings, New
Enterprise Associates, T. Rowe
Price, Franklin Templeton
Investments, Revolution
Growth
Tempus
Developer of a software platform that uses data to provide
doctors with information about treatment options for individual
patients and showing how other patients with similar genetic
profiles have responded to particular therapies.
$200
Q2
Joyance Partners, New Capital
Partners, King River Capital
Lark
Technologies
Developer of a health management application designed to
monitor and manage chronic diseases.
$45.7
Q2
Two Sigma Ventures, Javelin
Venture Partners, Bullpen
Capital, Builders VC, DCVC,
Brookfield Asset Management
Carbon
Health
Medical
Group
Operator of a healthcare network through which doctors are
accessible online through a mobile application and in-person at
its clinic in downtown San Francisco.
$30
Q2
Advent International
Corporation
Definitive
Healthcare
Solutions
Provider of a database to hospitals, physician groups, ambulatory
surgery centers, skilled nursing facilities and physicians with
accompanying analytics and insight needed to effectively
segment and research the provider market.
na
Q2
NEA, DFJ Growth, PSP
Investments, The Founders
Fund, GV, Maverick Ventures,
Sun Life Financial, SoftBank
Capital
Collective
Health
Developer of a cloud-based self-insurance platform that offers
integrated administration of all health plans through a single
portal, giving access to clear guidance, live concierge support, and
other digital tools.
$205
Q2
Andreessen Horowitz, US
Venture Partners, Cigna Corp.,
Civilization Ventures, Kaiser
Permanente Ventures,
Norwest Venture Partners,
Providence Ventures, Sanofi
Genzyme BioVentures,
Wellington Management
Company
Omada
Health
Provider of a digital therapeutics program based on a diabetes
prevention program clinical trial designed to pioneer digital
behavior change.
$73
Q2
Peloton Capital Management,
Royal Bank of Canada, Bank of
Montreal
123Dentist
Operator of a dental care information platform. The company's
platform helps customers search for new dentists or to solve any
emergency dental problem.
$425
Q2
Mitsui & Co.
GOQii
Developer of a fitness platform designed to offer virtual fitness
coaching services.
$60