Health IT & Health
Information Services
Semi-Annual Market Review
January 2019
www.hgp.com
Copyright 2019 Healthcare Growth Partners
Health IT & Health Information Services:
Market Review January 2019
Table of Contents
Health IT Executive Summary
3
Private Equity Survey
Health IT Market Trends
6
20
HIT M&A (Including Buyout)
23
Health IT Capital Raises (Non-Buyout)
28
Healthcare Capital Markets
29
Macroeconomics
33
Health IT Headlines
34
About Healthcare Growth Partners
40
HGP Transaction Experience
41
Appendix
44
1
2
3
4
5
6
7
8
9
10
11
Health IT Executive Summary
It's Getting Louder in Here!
If there is any change that we have noticed in the Health IT M&A and private equity world since
HGP's founding in 2006, we would boil it down to one word: Noise. Talk to any corporate CEO, and
they will tell you that they receive multiple calls or emails in a given day or hundreds of calls in a
given year, mostly from private equity (and, admittedly, from our peers in investment banking). The
level of noise did not increase overnight, but in the last few years it appears that the competitive
dynamics within Health IT private equity have reached a new level of ferocity due to the following:
Collectively, the number of funds pursuing Health IT, the overall capital base, and number of
outbound calls per fund has compounded to a level that is empowering executives and leaving
many investors feeling exasperated and sometimes wondering whether winning a deal in this
hyper-competitive environment ultimately means they were the ones crazy enough to pay the
highest price.
Investors will be happy to know that based on our latest Health IT Private Equity
Survey, they are not crazy (at least the majority that responded to our survey).
Copyright 2019 Healthcare Growth Partners
3
Health IT is a Maturing
Sector with a Strong Thesis
and Proven Returns
More Capital Competing for
Deals
Increasingly Automated
Digital Marketing and
Communications
NOISE!
1
2
3
1
1
2
3
As a sector, Health IT has reached a level of maturity that makes it core to the
investment thesis of most software- and business services-oriented private
equity investors, expanding the number of funds targeting the market.
The amount of private equity capital has ballooned, and funds, large and small,
are widening their investment criteria to compete further downstream, source
more creative transactions, or simply pay the highest price. While still remaining
disciplined, investors have a surge of capital to put to work across a market of
private companies that has not increased at the same rate.
Private equity investors are increasingly leveraging sophisticated CRMs, company
databases and tapping digital communications and content-based marketing to
expand their reach and their brands. Many investors utilize these tools to
approach deal origination with a volume-based strategy that can dilute the
efforts of a value-based strategy for everyone.
Health IT
Market
Specific
Private
Equity &
Structural
Paradigm
Copyright 2019 Healthcare Growth Partners
4
Health IT Executive Summary
It's Getting Louder in Here!
While the market is hypercompetitive and private equity investors may feel as though valuations are
priced to perfection, the reality is that investment valuations are priced to perform, and, based on
the findings from our latest Health IT Private Equity Survey, they seem to be doing just that:
Aggregate Health IT valuations have remained relatively steady in recent years
Health IT trades at comparable valuations to Enterprise SaaS
1
Health IT Revenue Multiples by Period
Date Range
xRev
Median
Median Deal
Value
# of Disclosed
Deals
2013 2014
3.90x
$109.4
52
2015 2016
3.85x
$116.6
78
2017 2018
3.74x
$180.0
60
2018 Only
4.62x
$215.7
25
We'll be the first to admit that Health
IT is as competitive as any segment in
the market. And while it may not feel
this way, our data
indicate
that
aggregate HIT valuations have been
stable
in recent years.
Valuations
ticked up in 2018, a trend we will
closely monitor for significance.
y = 14.524x + 3.574
R = 0.413
y = 20.025x + 2.7032
R = 0.4163
0.0x
2.0x
4.0x
6.0x
8.0x
10.0x
12.0x
14.0x
-10.0%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
EV/2019 Revenue Estimate2019 Expected YoY Growth Rate
Enterprise
HIT
Linear (Enterprise)
Linear (HIT)
To make the comparison, we
performed a simple regression
analysis
of Health
IT
and
Enterprise SaaS.
Put another
way, we compared
revenue
multiples to growth rates across
the two sectors to determine
whether the two markets are
valued similarly when growth is
the primary consideration. As
evidenced by the best-fit lines,
Health IT trades at comparable
valuations to counterparts
in
Enterprise SaaS, at least using
this basic
formula across a
sample size of 40 publicly
traded companies.
Looking at our survey data, in 2016, Health IT was
viewed to trade at a premium to Enterprise SaaS.
Based on our 2018 data, the results are more evenly
distributed such that Health IT is now viewed to
trade in-line with Enterprise SaaS.
Does Health IT Trade at a Premium to
Enterprise SaaS?
Response
2016 Survey
2018 Survey
Yes
52%
34%
Maybe
34%
45%
No
14%
21%
The regression data can be used as a guidepost for SaaS valuations. Using the y-intercept as a measure, at a 0% growth rate a
HIT SaaS company can expect to trade at 2.7x revenue. For each 10% increase in growth, there is approximately a 2x increase
in revenue multiple, and the steepness of that slope underscores the importance of growth for the public company set. This is
just one admittedly oversimplified way of looking at the very complex formula of valuation.
Copyright 2019 Healthcare Growth Partners
5
Health IT Executive Summary
It's Getting Louder in Here!
Health IT investments are generally living up to expectations, and, if anything, there is
increasing investment interest rather than increasing fear of a bubble
Based on the 105 participants in our 2018 Health IT Private Equity Survey, private equity investors
are more than satisfied with their Health IT investment performance and strategy. Only 5% of
respondents reported that Health IT is not living up to their investment expectations. When asked
whether Health IT is in a bubble, the mix of responses did not shift materially from our 2016 survey,
with 28% responding that Health IT is in a bubble today versus 25% two years ago.
Valuations correlate with expectations, and expectations for Health IT are high, but they've been at
these levels for years. A breakdown occurs when reality does not meet expectations, and even deep
into this investment cycle, this has yet to occur.
Taken together, valuations are priced for performance more than perfection. Given the confluence
of favorable fundamentals, the Health IT market is performing and has a strong thesis to do so for
years to come. However, valuations are priced with little margin for error, and in order to sustain
performance over the course of time, competitive dynamics will force investors to either step up or
step out. We hope that amid the moral hazard of healthcare, investors seek the high road of driving
strong returns while supporting the greater good of health and wellness.
1
0%
20%
40%
60%
80%
100%
2016
2018
Is HIT in a bubble?
Yes
Maybe
No
0%
20%
40%
60%
80%
100%
2016
2018
Is HIT living up to expectations?
Yes
Maybe
No
Copyright 2019 Healthcare Growth Partners
6
HGP 2018 Private Equity Survey
Results and Commentary
Survey Background
HGP surveyed hundreds of private equity funds across all stages and received 105 responses.
Responses concentrated toward Growth Equity and Venture Capital investors, who respectively
invest in early and earlier stage companies. The distribution of responses across the stages of
investing is consistent with the distribution of investment activity across the company lifecycle. The
majority of institutionally funded health IT companies are receiving venture and growth investments,
with relatively fewer buyout transactions. This investment distribution pattern is consistent across
almost any growth industry.
It is important to note that our survey likely has selection bias, which we cannot fully assess given
the confidential nature of the survey response data. Anyone with a propensity to respond to a
survey about investing in health IT is likely to have stronger interest in health IT than those who did
not respond to the survey. Furthermore, we are more likely to generate responses from individuals
who are familiar with HGP, and HGP generally interacts with investors interested in health IT
transactions. It is safe to conclude that our survey findings have a bias toward respondents who are
more interested in health IT investments than not. However, we believe that the data set is broad
enough to be meaningful and deliver insights, particularly in mapping out the priorities and criteria
of active health IT investors. We begin by summarizing the composition of respondents.
Q1: What type of fund do you manage?
Q2: What is the size of your most recent fund?
*3 respondents did not answer this question
2
Venture
Capital, 34%
Growth Equity, 41%
Buyout, 25%
< $100mm
$100mm - $500mm
$500mm - $1B
> $1B
Total
Venture Capital
21
13
1
1
36
Growth Equity
4
19
11
7
41
Buyout
3
12
6
4
25
Total
28
44
18
12
102
Most Recent Fund Size
Copyright 2019 Healthcare Growth Partners
7
HGP 2018 Private Equity Survey
Results and Commentary
Q3: Do you seek a certain revenue threshold for your investments?
The response to this question highlights the key distinction of revenue criteria between each
investor category. 100% of Venture Capital respondents have a revenue threshold under $5mm with
53% having no revenue threshold at all. This result shows a shift from the 2016 survey results which
showed 13% having a $5mm threshold. This news appears exciting for young companies as it
indicates that the vast majority of Venture Capital funds having low thresholds and potentially a
large share are willing to invest in companies under $1mm. However, it is important to note that as
the revenue threshold shifts to being entirely $1mm or none, the opportunity (aka, competitive) set
grows larger. Institutional funding for pre-revenue companies remains nearly impossible with
funding odds increasing with the proven background and credentials of the entrepreneur.
On the other hand, 79% of Growth Equity investors require revenue in excess of $5mm which is
consistent with the 83% from the 2016 survey results. However, just over a quarter reported a
threshold greater than $10mm, which is a drop from over half in 2016. This drop is consistent with
what we saw among venture investors and is in-line with our perspective that investors across the
board are stretching into the lower end of their investment criteria to put capital to work in health IT.
While $10mm in revenue no longer appears to be a key threshold for Growth Equity investors, it
remains key for Buyout investors, with 69% requiring $10mm as a threshold (exactly the same as
2016). What differentiates Growth Equity from Buyout is control and profitability. Buyout investors
typically make control investment by buying out the interests of existing shareholders (secondary
purchase), often with the help of debt (or leverage) which generally requires profitability to borrow
against. Growth Equity investors may buy some secondary shares, but they mostly deploy cash into
newly issued shares of the company that is then utilized to make investments in growing the team,
expanding the product, or making acquisitions.
2
53%
12%
22%
47%
9%
4%
0%
51%
13%
0%
26%
43%
0%
2%
17%
0%
0%
9%
0%
20%
40%
60%
Venture Capital
Growth Equity
Buyout
% of Funds Responding to SurveyNone
$1mm
$5mm
$10mm
$20mm
$50mm
Copyright 2019 Healthcare Growth Partners
8
HGP 2018 Corporate Survey
Results and Commentary
Q3: Do you seek a certain revenue threshold for your investments? (Continued)
The data on revenue thresholds underscore the continued immaturity of the health IT market as well
as the vast amount of capital chasing a still relatively small sector. Venture Capital and Growth Equity
investors continue to shift towards lower revenue thresholds allowing low revenue companies to
choose from an increasingly wide array of investors. This relatively low revenue threshold is
undoubtedly bolstering valuations, heightening competitive dynamics across investor classes, and
creating opportunity for large returns for early stage companies and investors who can grow into
this highly sought investment tier. On the other hand, the large number of well-funded vendors
makes for a very competitive market landscape.
Due to the scarcity of larger platform investments relative to the supply of capital seeking those
investments, many buyout investors are making investments near or even below their minimum
investment threshold. This has several implications. For one, buyout investors are competing with
Growth Equity investors, resulting in competition that may raise valuations. When reaching
downstream, buyout investors are making smaller platform investments but still have the need to
deploy capital, which may result in a desire to put additional capital to work through follow-on
acquisitions by the platform investment. The latter point is driving significant M&A activity. Private
equity backed platforms present an excellent landing spot for earlier stage companies to exit,
especially if those early stage companies might consider a deal that involves a portion of the
transaction consideration to be paid in the form of rollover equity or earnout.
Q4-5: How do you prioritize Health IT as an investment vertical? Approximately how many
platform (excluding add-on) Health IT investments has your fund made since 2016?
We broadly define Health IT as any health software, data, information, consulting, or technology
enabled outsourcing company that may serve providers, payers, pharma, employers, or consumers.
This includes both health software and health business services.
2
28%
45%
27%
Opportunistic (<20%)
Significant share of focus (20-50%)
Majority of investment focus (>50%)
18%
31%
23%
28%
0%
5%
10%
15%
20%
25%
30%
35%
0
1-2
2-5
>5
% of Funds Responding to SurveyHIT Investments since 2016
Copyright 2019 Healthcare Growth Partners
9
HGP 2018 Private Equity Survey
Results and Commentary
Q4-5: How do you prioritize Health IT as an investment vertical? Approximately how many
platform (excluding add-on) Health IT investments has your fund made since 2016? (Cont.)
Of the 105 responses to our survey, a little more than focus the majority of their investments on
health IT, a similar share are opportunistic (<20% directed toward health IT), and the remaining 45%
focus between 20-50% of efforts on Health IT. This distribution is similar to that of the 2016 results,
with a minor shift away from majority to significant focus. In line with our 2016 results, over half of
the respondents have completed more than two health investments since 2016, and the percentage
completing more than 5 has slightly increased.
While there is some bias in our survey findings, this bias means that our respondents are likely to be
more knowledgeable of the health IT space than the typical investor. In our opinion, this makes the
following responses more valuable and meaningful to companies in the space.
Q6-7: Is your investment focus on Health IT growing or contracting? How does your Health IT
deal pipeline (aka, deal flow) in 2018 compare to 2017?
Of the 105 respondents, 43% reported a growing interest in health IT investing and only 4%
reported a contracting interest, consistent with 2016 results. 44% reported a more active deal flow
and only 11% less deal flow, compared to 38% and 20% in 2016.
This understated question is an incredibly positive signal for the health IT industry. Investors across
all classes, Venture, Growth, and Buyout, are showing more interest and seeing more deals in health
IT. Effectively, one could interpret this to mean that supply of capital is generally trending upward
along with demand for that capital.
2
Growing
43%
About the
Same
53%
Contracting
4%
More active
than 2017
44%
About the
same as 2017
45%
Less active
11%
Copyright 2019 Healthcare Growth Partners
10
HGP 2018 Private Equity Survey
Results and Commentary
Q8: How does your Health IT deal flow compare to other sectors?
Q9: How do Health IT valuations (or valuation expectations) compare to other comparable
software or information/business services sectors that you evaluate?
Survey respondents were asked whether Health IT Software and Health IT Services valuations are
lower, comparable, or higher than their counterparts in enterprise software and business/ tech
services, respectively. With regards to Health IT Services valuations, 55% of respondents claimed
higher valuations, 36% comparable valuations, and 8% lower valuations in Health IT Services versus
Business/ Tech Services. With regards to Health IT Software valuations, 34% of respondents claimed
higher valuations, 45% comparable valuations, and 21% lower valuations in Health IT Software
versus Enterprise Software.
The premium for IT-enabled healthcare services is consistent with our 2016, however health IT SaaS
is increasingly coming inline with its counterparts in enterprise software.
2
More Active,
35%
About the
Same, 43%
Less Active,
22%
Health IT
Software vs.
Enterprise
Software
Health IT
Services vs.
Business/Tech
Services
(1.0)
(0.5)
0.0
0.5
1.0
Comparable Valuations
Higher Valuations
Lower Valuations
Copyright 2019 Healthcare Growth Partners
11
HGP 2018 Private Equity Survey
Results and Commentary
Q10: Do you have strategic LPs that can serve as potential commercial relationships or
business opportunities for your Health IT portfolio companies in a meaningful way?
2
Yes,
59%
No,
41%
The market for strategic
investments is rapidly evolving.
Strategic investing may take many forms in varying degrees of
strategic influence. Responses to this question mirror those of
2016 in which 44% of respondents answered "no" and 56%
answered "yes". This slight uptick in funds having strategic LPs
shows a continuation of the trend we saw in 2016. Key to this
trend is greater forgiveness in the market for the conflict-of-
interest that a strategic investment may create.
Strategic
investors include a cross section of corporate venture capital,
healthcare organizations (payers, providers, pharma), and an
active mix of institutional private equity with a strong base of
strategic limited partners.
Copyright 2019 Healthcare Growth Partners
12
HGP 2018 Private Equity Survey
Results and Commentary
Q11: Do you frequently use structure as a strategy (eg, participating preferred) to lift
valuations to be more competitive in transactions?
Although some very early stage venture and later stage buyout funds invest in the form of common
stock, the majority of minority and partial control investments involve a preferred security. The 2018
results mirror those of 2016, with the exception of buyout shifting more towards "yes", signaling a
drop in the use of common stock. Governance preferences that come with preferred securities
typically include board seats, investment rights, and operational controls. Financial preferences
generally include an array of liquidation rights, such as payment of dividends, anti-dilution,
liquidation preferences, and participation. Any and all of these rights juice returns for investors and
provide downside protection, sometimes at the expense of other shareholder classes, or worse, at
the expense of misaligning the interests of all shareholders on the cap table. However, risk equals
return, and whether the risk is in the form of taking on an early stage investment or paying an
inflated price, investors will often structure preferences that compensate for the risk they undertake.
Structure is frequently used to bolster valuations, a trade that shareholders are often willing to make.
It is admitted a challenge to create perfect alignment across shareholders who invest at different
valuations at different stages of the risk cycle. We advise a thoughtful analysis to best align
transaction structure with shareholder incentives across all investors and founders, both considering
upside and downside scenarios. These models and general common sense should help red flag
situations that may cause shareholder misalignment.
2
62%
74%
52%
38%
26%
48%
0%
20%
40%
60%
80%
Venture Capital
Growth Equity
Buyout
% of Funds Responding to SurveyYes No
Copyright 2019 Healthcare Growth Partners
13
HGP 2018 Private Equity Survey
Results and Commentary
Q12: Is your Health IT investment strategy living up to expectations?
Investment interest, deal flow, and valuations in health IT track higher than comparable software and
business services sectors. We are certain that dozens if not hundreds of private equity investors have
set aside larger capital allocations to health IT investing. These trends beg performance questions
about the strategy. Overwhelmingly, investors across all classes are satisfied by the performance of
their health IT investment strategy and portfolio, more so even than they were in 2016.
As a whole, only 5% of respondents reported being dissatisfied, a slight drop from 2016. Growth
Equity investors had the highest satisfaction, with 63% reporting a health IT investment strategy that
lives up to expectations and 35% responding maybe, followed closely by Venture Capital with 58%
"yes", 42% "maybe", and 0% "no". Buyout investors showed less conviction, with 56% responding
maybe, but only 16% indicating that their health IT strategy is not living up to expectations. Notably,
there was an increase this year in Buyout respondents answering "maybe", though results are overall
in line with those in 2016. Either investors are delusional, or health IT is proving to be a sound
investment thesis.
2
58%
63%
28%
42%
35%
56%
0%
2%
16%
0%
10%
20%
30%
40%
50%
60%
70%
Venture Capital
Growth Equity
Buyout
% of Funds Responding to SurveyYes
Maybe
No
Copyright 2019 Healthcare Growth Partners
14
HGP 2018 Private Equity Survey
Results and Commentary
Q13: Do you think Health IT is in a bubble?
As previously discussed, bubble sentiment has changed little in recent years.
Investors have a
modest weighting toward bubble sentiment, however these results nearly mirror those from our
2016 survey. Bubble sentiment declines as investors progress further along the growth curve, with
venture investors reporting bubble behavior at a much higher rate than buyout investors.
Q14: If you haven't made as many Health IT investments as you'd like, what is a common
cause?
The responses from this open-ended question generally cut across four themes: challenging
business models/ lack of high quality assets, deal sourcing, competition from strategic investors, and
valuation. It is notable that in addition to the detailed quotes outlined below, 17 firms simply
responded with "valuation" (or a similar variation of this) as to why they have not made as many
Health IT investments as they would have liked. Notable responses are included on the following
page.
2
36%
28%
16%
56%
53%
68%
8%
19%
16%
0%
10%
20%
30%
40%
50%
60%
70%
80%
Venture Capital
Growth Equity
Buyout
% of Funds Responding to SurveyYes
Maybe
No
Copyright 2019 Healthcare Growth Partners
15
HGP 2018 Private Equity Survey
Results and Commentary
Q14: If you haven't made as many Health IT investments as you'd like, what is a common
cause? (Continued)
2
Category
Fund Comments
"Not that many high quality assets out there; lots of gimmicky point solutions with inexperienced
entrepreneurs; the high quality companies are going for valuation that will make it tough to have
an OK return given the sizable risk still bound to these assets."
"Few high quality assets out there, lots of noise; those companies that are notable have insane
valuations."
"Lack of investible business models"
"The stage is too early for us (e.g. the go-to-market plan missing, the product is not yet ready,
no initial pilots/customers)."
"Limited resources and time spent elsewhere."
"Flow of appropriately sized opportunities"
"Not seeing enough deals, minimal specialization internally."
"Didn't have an operating partner focused on that sector"
"Focus on more innovative tech-enabled services models that may or may not have better
valuations."
"Finding quality deals that meet our investment requirements at a reasonable valuation."
"We invest non-control structured equity stakes, and sellers are often times looking for a
complete exit given the high multiples."
"Lack of knowledge about the specific niche industry."
"Round sizes are increasing in size and moving earlier, so that many "Series A" deals that
historically would be post-recurring revenue are now during pilot trials or even pre-pilot."
"Competitive deal environment makes it difficult to win."
"Competitive strategics."
"Competition and associated high valuation multiples result in low chance of signing up a deal."
17 funds responded "valuation" (responses below are in addition to the 17)
"Inflated valuations - there is a lot of money to go around the market right now. It's definitely an
entrepreneur's market."
"Valuation expectations relative to financial performance."
"Valuations are too high at the A, B and beyond ranges (vs seeds that are OK). Given dearth of
venture scale exits, it becomes hard to justify investments and there are other sectors where the
$ can go with better success."
"Finding the right quality assets at the right price."
"Valuations are also significantly higher than years past."
Business ModelValuationStrategic CompetitionDeal Sourcing & Investment Strategy
Copyright 2019 Healthcare Growth Partners
16
HGP 2018 Private Equity Survey
Results and Commentary
Q15: Do you proactively develop a thesis for investing in specific market verticals or do you
take a more general, reactive approach to investment opportunities as they present
themselves?
A proactive strategy is defined as an investment strategy that targets specific
investment
opportunities based on a preconceived investment thesis that addresses specific market and
competitive dynamics. True proactive investors will filter investment opportunities that do not meet
their investment thesis. In order to not limit themselves, proactive investors generally require
multiple theses across multiple segments in order to ensure active and diverse deal flow. On the
other hand, reactive investors tend to focus less on a market thesis and more on opportunism. In
some respects, it is hard to say that the two strategies are mutually exclusive. A reactive investor
generally will not make an investment unless it stands up to a strong investment thesis, which may
be consciously or subconsciously the rationale behind the positive reaction to the investment.
However, the approaches tend to be different. Proactive investors generally pursue a more
aggressive outbound campaign of identifying and contacting potential companies that meet their
thesis.
On occasion, HGP makes select investments, and despite our sharp industry focus, we are often
reactive investors. As a generalization, two criteria make us react. First, strong, trustworthy, and
ideally proven management teams. Second, regardless of market segment or size, we look for
companies that offer a go-to market and pricing strategy capable of shortening the sales cycle and
aligning value across the conflicting stakeholder incentives that are unique to this complex market.
The complexity of the healthcare market makes delivering value and designing a go-to-market
strategy around the value proposition as critical and complicated as ever. In this market, it is easy to
be misled by theoretically sound solutions that are practically difficult to implement.
The 2018 survey results were overall in line with those in 2016. Venture capital swung towards being
more reactive (39% in 2018 vs. 20% in 2016) and growth equity and buyout swung the opposite
direction showing a slight increase in proactive responses.
2
61%
74%
80%
39%
26%
20%
0%
20%
40%
60%
80%
Venture Capital
Growth Equity
Buyout
Proactive
Reactive
Copyright 2019 Healthcare Growth Partners
17
HGP 2018 Private Equity Survey
Results and Commentary
Q16: How important are the following characteristics when assessing an investment?
Investment criteria varies widely by stage of investment. In order of priority, Venture Capital
investors seek strong management, a large addressable market opportunity, growth, and recurring
revenue. This order of priority is consistent with the 2016 results, though there was a notable
increase in the number of respondents assigning recurring revenue as a must have (71% vs. 48% in
2016). Profitability is not a requirement for Venture Capital with zero respondents assigning it as a
must have, but obviously a path to it and the ability to demonstrate scale is important.
Living up to their categorical name, Growth Equity investors rate growth and addressable market at
the top, followed closely by recurring revenue, then strong management. Profitability was of lower
importance to Growth Equity investors; however, we believe that most Growth Equity investors will
be less forgiving about losses than their Venture Capital counterparts.
Finally, Buyout investors scored growth trajectory highest,
followed by addressable market,
profitability, and recurring revenue. There appears to be a larger emphasis on growth trajectory this
year than in the past. It is no surprise that profitability is of high priority for these investors as they
typically prefer to borrow against a company's profits as much or more than 6x EBITDA. Similar to
2016, strong management came in last, with only 36% marking it as a must have. This is most likely
due to the fact that management shareholders may sell during a recapitalization or buyout
transaction, and in many cases, the Buyout investor will install their own executive leadership at the
time of investment.
We did not ask what investors avoid. We would guess that most investors avoid companies with
large losses with a challenging line of sight to profitability. Second to operating losses would be a
low gross margin that makes scalability a challenge. Significant losses even with impressive revenue
growth may cause a significant drag on valuation or simply make a company un-fundable or unable
to sell.
2
0%
71%
89%
97%
97%
24%
74%
98%
98%
65%
68%
60%
88%
68%
36%
0%
20%
40%
60%
80%
100%
Profitability
Recurring Revenue Growth Trajectory Addressable Market Strong Management
% Investors Responidng "Must Have"Venture Capital
Growth Equity
Buyout
Copyright 2019 Healthcare Growth Partners
18
HGP 2018 Private Equity Survey
Results and Commentary
Q17: Within Health IT, which sectors or themes are under consideration for investment?
Consistent with our 2016 results, the sector of highest interest is Population Health Management,
which generally encompasses technologies and services that support value-based care delivery
models as well as the decentralization of care. Revenue Cycle Management is the second most
favored sector, closely followed by Infrastructure Technology. We imagine the interest in RCM
encompasses both payer- and patient-based payments based on the transaction themes over the
last year. RCM leaped from 50% to 66% between our 2016 and 2018 surveys, the largest swing in
any subsector.
Additional detail about the sector/theme definitions was provided in the survey question. The survey
further defined Population Health Management to include analytics, care coordination, and patient
engagement; Infrastructure Tech to include resource management, supply chain, and compliance;
and Benefits Tech to include insurance portal, enrollment, and exchanges. Approximately 18% of
respondents said they were indifferent (these are probably funds that categorize themselves as
Reactive investors), and several investors submitted write-in responses which included clinical
coding, digital therapeutics, and data integration amongst others.
2
18%
23%
34%
42%
45%
52%
55%
60%
64%
66%
76%
0%
20%
40%
60%
80%
100%
Indifferent
Direct-to-Consumer Tech/ Services
Life Sciences Tech
Employee & Member Wellness / Care Mgmt
EMR/ Clinical Documentation
Benefits Tech
TeleMed and Virtual Care
Payer Services
Infrastructure Tech
RCM Tech or Services
Population Health Management
% Responding "Under Consideration"
Copyright 2019 Healthcare Growth Partners
19
HGP 2018 Private Equity Survey
Results and Commentary
Q18: What is the most attractive customer segment represented by Health IT companies you
evaluate?
Payer/TPA/Employer took over the top spot in our 2018 survey, with 57% of respondents viewing it
as a "Most Attractive" segment.
This marks a change from our 2016 survey, which reported
Hospital/Health System (including ACO) as the most attractive segment, with 62% of responses.
Payer/TPA/Employer received 48% of responses in 2016.
We speculate that Payers/TPA/Employer took over the top spot as a result of the increasing number
of self-insured employers since implementation of the ACA. In 2017, 79% of employers with over
200 employees self-insure their health benefits, and 91% of employers with over 5,000 employees
are self-insured. The employer is effectively the largest insurer in the United States, and unlike a
traditional health insurance company, they are not equipped with the tools required to manage
patient populations. And since employers are keenly focused on maximizing profits and enhancing
employee satisfaction and retention, this is an extremely attractive customer segment for dynamic
companies that offer solutions capable of bending the healthcare cost curve such as population
health management, telemedicine, advocacy, care management, predictive analytics, benefits
administration, patient engagement, and worksite health.
2
11%
17%
21%
22%
26%
48%
57%
0%
20%
40%
60%
Patient/ Patient Family
Indifferent
Other Clinical Settings (urgent care, post-
acute)
Pharma/ Device
Physicians
Hospital/Health System (including ACO)
Payer/TPA/ Employer
% of Funds Marking Segment as "Attractive"
Health IT Market Trends
HGP Analysis of HIT Sector Valuations
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, 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 oriented companies received 6.9x 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 from buyers.
Copyright 2019 Healthcare Growth Partners
20
3
Reported
2014 2018
Deals with
Disclosed
Revenue
Multiples
Deals with
Disclosed
EBITDA
Multiples
Revenue Multiple
EBITDA
Multiple
25th
%-tile
Median
75th
%-tile
Mean
Std.
Deviation
Median
Telemed
7
2
4.5x
5.6x
10.0x
7.3x
4.2x
18.1x
Clinical Trial Mgmt
4
3
2.1x
4.5x
6.9x
4.5x
2.7x
12.9x
Analytics
18
8
3.0x
4.2x
5.0x
4.5x
2.4x
16.2x
Population Health
39
10
2.6x
3.9x
6.9x
6.2x
6.1x
14.2x
PM/EMR
33
18
1.7x
3.9x
5.0x
3.6x
2.0x
14.0x
Benefits Mgmt
14
1
2.2x
3.9x
6.8x
5.9x
6.1x
20.0x
Content
14
2
2.8x
3.8x
6.9x
5.0x
3.0x
11.2x
RCM Tech
18
15
2.7x
3.4x
5.3x
4.1x
2.1x
16.0x
Infrastructure Tech
25
17
2.3x
3.2x
5.3x
3.7x
2.0x
11.0x
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
17
9
1.2x
1.7x
2.5x
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
HGP Analysis of HIT Sector Valuations
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, Analytics, 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.
The table on page 22 provides additional context on the valuation trends within each sector as well
as a sample of recent transactions within each. 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.
Copyright 2019 Healthcare Growth Partners
21
3
Health IT Market Trends
HGP Analysis of HIT Sector Valuations
Copyright 2019 Healthcare Growth Partners
22
3
Sector
Description
Representative Deals
Telemed (7 deals)
Median: 5.6x
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 (4 deals)
Median: 4.5x
Std. Dev.: 2.7x
Includes traditional CTMS vendors as
well as other vendors that deliver
value in the clinical trial process.
Bracket Global (Genstar Capital),
Phlexglobal (Vitruvian Partners),
NOTOCORD (Instem)
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 (39 deals)
Median: 3.9x
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)
PM/EMR (33 deals)
Median: 3.9x
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)
Benefits Management (14 deals)
Median: 3.9x
Std. Dev.: 6.1x
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 (18 deals)
Median: 3.4x
Std. Dev.: 2.1x
Includes tech-oriented RCM vendors
serving hospitals and physicians, and
to a lesser extent, payers.
Cotiviti (Verscend), ABILITY (Inovalon),
Zirmed (Navicure), Brightree (ResMed),
MedAssets (Pamplona)
Infrastructure Tech (25 deals)
Median: 3.2x
Std. Dev.: 2.0x
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 (17 deals)
Median: 1.7x
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)
Health IT M&A (Including Buyout)
Overview
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:
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
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
Pricing Alignment with ROI
Pricing methodology
that
aligns with
customer ROI the vendor wins when the
customer wins
General Considerations
Market leadership (or opportunity to lead) =
favorable supply/demand characteristics at
exit
Large and growing market opportunity with
strong financial characteristics = recurring
revenue and growth, inherent scalability if
not profitability, strong management, and
size
Scalable Distribution Model
Efficient distribution model (eg, customer
acquisition cost < customer value)
Data Rights
Contract structures that contain explicit
rights to data
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4
1
2
3
5
6
4
Copyright 2019 Healthcare Growth Partners
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)
Health IT M&A Activity
The following chart summarizes annual M&A activity since 2013, 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 2018 has been no exception to that rule. After 372 transactions in 2017,
health IT M&A activity remained steady in the 350+ range, closing 358 transactions in 2018. 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.
24
4
Copyright 2019 Healthcare Growth Partners
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)
$5,093
$35,736
$14,014
$53,916
$28,978
$37,164
$361
$2,520
$1,084
$905
$771
$1,085
192
274
285
297
302
282
40
47
51
77
70
76
0
50
100
150
200
250
300
350
2013
2014
2015
2016
2017
2018
$-
$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)
Health IT M&A Valuation
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.
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4
Copyright 2019 Healthcare Growth Partners
HIT Software Companies
HIT Services Companies
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
Revenue
Multiple
EBITDA
Multiple
Transaction
Value
All
Transactions
# of Transactions
169
76
174
56
33
56
Median
3.8x
14.0x
$ 133.40
1.9x
9.8x
$ 154.36
Mean
4.8x
15.2x
$ 544.16
2.3x
10.8x
$ 637.62
<$30mm
Transactions
# of Transactions
44
10
42
14
8
14
Median
2.3x
9.3x
$ 9.50
1.3x
9.0x
$ 14.70
Mean
4.3x
10.7x
$ 11.23
1.7x
9.2x
$ 13.76
$30-100mm
Transactions
# of Transactions
33
14
33
12
7
12
Median
3.8x
10.5x
$ 50.29
1.5x
8.0x
$ 54.50
Mean
5.2x
12.5x
$ 54.48
1.7x
8.0x
$ 56.99
$100-500mm
Transactions
# of Transactions
59
26
64
19
11
19
Median
4.2x
14.5x
$ 207.50
2.1x
10.9x
$ 247.30
Mean
4.9x
16.7x
$ 227.06
2.8x
11.0x
$ 294.68
$500mm-$1B
Transactions
# of Transactions
14
10
16
5
2
5
Median
4.6x
16.1x
$ 712.50
2.7x
11.5x
$ 690.00
Mean
5.0x
16.9x
$ 684.03
2.8x
11.5x
$ 665.64
>$1B
Transactions
# of Transactions
19
16
19
6
5
6
Median
4.4x
15.8x
$ 2,366.42
2.6x
15.5x
$ 4,193.29
Mean
5.0x
16.9x
$ 3,523.09
2.7x
16.4x
$ 4,317.16
Health IT M&A (Including Buyout)
Health IT M&A Valuation, continued
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 $30mm, and a second inflection at $100mm especially with higher percentile
transactions. The second inflection is in part due to a private equity universe that has expanded
leverage capacity for larger transactions, which in turn drives up valuation multiples.
In 2018, Healthcare Growth Partners monitored 358 health IT and related services M&A transactions,
compared to 372 transactions in 2017. In terms of aggregate deal size, HGP observed $38.2 billion
of total transaction value in 2018, far surpassing the $29.7 billion of total transaction value reported
in 2017. The median revenue multiple in 2018 was 3.8x for HIT Software, on par from 3.7x in 2017,
and 1.9x for Health IT Services, on par for trends from 2017.
Detailed annual trends can be found in the following bar chart.
It should be noted that 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 2018.
26
4
HIT Software Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
8.5x
10.0x
9.0x
7.3x
8.6x
75th Percentile
4.4x
6.9x
6.3x
6.5x
6.9x
50th Percentile
2.3x
3.8x
4.2x
4.6x
4.4x
25th Percentile
1.7x
2.8x
2.8x
3.8x
3.2x
HIT Services Revenue Multiple Distribution by Target Enterprise Value
Percentile
<$30mm
$30-100mm
$100-500mm
$500mm-$1B
>$1B
90th Percentile
4.3x
2.6x
5.7x
nm
nm
75th Percentile
2.0x
2.4x
3.6x
4.8x
3.3x
50th Percentile
1.3x
1.5x
2.1x
2.7x
2.6x
25th Percentile
1.0x
1.1x
1.6x
0.8x
2.3x
Copyright 2019 Healthcare Growth Partners
Health IT M&A (Including Buyout)
Median M&A Multiples 2010 2018
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.
HIT M&A Deals by Quarter
27
4
Copyright 2019 Healthcare Growth Partners
3.8X
3.8X
3.9X
3.4X
5.0X
14.0X
14.0X
14.0X
14.0X
15.6X
0.0X
5.0X
10.0X
15.0X
20.0X
2014
2015
2016
2017
2018
Health IT SoftwareRevenue
EBITDA
1.2X
2.1X
1.8X
1.9X
2.5X
10.0X
9.0X
10.0X
9.6X
10.2X
0.0X
5.0X
10.0X
15.0X
2014
2015
2016
2017
2018
Health IT ServicesRevenue
EBITDA
63
56
55
58
71
97
76
77
91
68
92
85
99
86
104
85
97
89
91
95
81
106
96
75
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 Qtr3 Qtr4
2013
2014
2015
2016
2017
2018
Health IT Capital Raises (Non-Buyout)
The chart below summarizes quarterly private-equity and venture capital activity in Health IT and
related services since 2013, according to the Healthcare Growth Partners database. The data below
and in this section do not include buyout private equity activity. In 2018, Healthcare Growth Partners
monitored 786 capital raise transactions, far surpassing the 666 investment transactions in 2017.
HIT Investment Activity
HIT Investment Deals by Quarter
Refer to Appendix C for a list of notable non-buyout capital raises in 2018.
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Copyright 2019 Healthcare Growth Partners
69
68
70
78
74
100
117
92
87
122
102
115 107 98
135
154
128
189 188
156
200
240
196
145
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
2013
2014
2015
2016
2017
2018
$2,853
$4,565
$6,176
$5,615
$7,463
$10,543
$254
$870
$1,007
$2,384
$3,187
$5,729
245
311
361
361
411
530
43
73
67
134
255
256
0
100
200
300
400
500
600
2013
2014
2015
2016
2017
1H-2018
$-
$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
Healthcare Capital Markets
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 32.
2018 was a volatile year for the market, with the S&P 500 setting an all-time record in September
and then ending the year down 6.2%. Strikingly, the HGP HIT Index, which gained 25.7% in 2017,
ended the year at 14.0%. Historically the leader amongst HGP's Healthcare Indices, this year it was
outperformed by the Payers Index which gained 17.4%. The PBM Index, which has been in the
crosshairs of both regulatory and competitive moves, was the largest decliner falling 14.2% over the
period. Other than PBM & HIT & Payer Services, all of the HGP Healthcare Indices outpaced the
S&P 500. The chart and the table on the following page summarize the performance of the HGP
health IT and services indices in 2018.
HIT & Related Index Performance 2018
29
Copyright 2019 Healthcare Growth Partners
Jan. 30 Amazon, Berkshire, JPM
Partnership announced
Feb. 15 Roche announces $2.1B
Flatiron acquisition
Mar. 8 Cigna announces Express
Scripts acquisition
May 14 Trump targets Medicare,
PBMs in plan to lower drug prices
Jun. 8 Trump Administration says it
won't defend key provisions of the ACA
Jun. 28 Amazon buys PillPack, online
pharmacy, for nearly $1B
6
Nov. 12 athenahealth enters definitive
agreement to be acquired by Veritas
Nov. 28 CVS closes acquisition of
Aetna
Dec. 14 Federal court rules Obamacare
unconstitutional
Oct. 15 CMS proposes to require drug
manufacturers to disclose prices in ads
Aug. 21 Anthem partners with
Walmart to expand access to OTC drugs
July 16 CMS proposes new rule to
boost telehealth payments
HIT Index Performance Detail 2018
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Company
Share Price
% Change
EV/
Rev
EV/
EBITDA
Allscripts
-33.7%
1.9X
9.7X
iRhythm Technologies
24.0%
11.3X
NMF
Athenahealth*
0.05%
4.0X
14.4X
Medidata Solutions
6.4%
6.3X
26.3X
Benefitfocus
69.3%
6.0X
NMF
MINDBODY
19.5%
6.8X
NMF
Care.com
7.0%
2.8X
17.2X
Model N
-16.0%
2.7X
NMF
Castlight Health
-42.1%
1.5X
NMF
NantHealth
-82.2%
2.8X
NMF
Cerner
-22.2%
3.1X
10.8X
NextGen
11.6%
1.9X
12.7X
Computer Programs &
Systems
-16.5%
1.7X
10.8X
NRC Health
2.3%
8.1X
22.8X
Connecture*
115.6%
NA
NA
Omnicell
26.3%
3.2X
20.4X
Cotiviti*
38.9%
NA
NA
Oneview Healthcare
-73.3%
2.1X
NMF
ehealth
121.2%
3.2X
27.6X
Orion Health Group
21.6%
1.3X
NMF
Evolent Health
62.2%
2.5X
NMF
Premier
28.0%
3.6X
11.2X
Fitbit
-13.0%
0.4X
NMF
Roper Technologies
2.9%
6.3X
18.1X
Health Insurance
Innovations
7.1%
1.5X
7.6X
Simulations Plus
23.6%
11.7X
NA
HealthEquity
27.8%
14.9X
NMF
Streamline Health
Solutions
-52.1%
1.1X
16.4X
HealthStream
4.3%
2.6X
14.8X
Tabula Rasa Healthcare
127.3%
6.5X
NMF
Hms Holdings
66.0%
4.1X
16.1X
Teladoc
42.2%
8.2X
NMF
Inovalon Holdings
-5.5%
5.6X
18.9X
Veeva Systems
61.6%
17.5X
NMF
Invitae
21.8%
5.3X
NMF
Vocera Communications
30.2%
6.1X
NMF
IQVIA
18.7%
3.2X
15.0X
Healthcare Capital Markets
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Copyright 2019 Healthcare Growth Partners
2018 Index Performance
S&P 500
-6.2%
Payers
17.4%
NASDAQ
-3.9%
PBM
-14.2%
CRO
5.7%
Healthcare Services
4.6%
HIT
14.0%
HIT & Payer Services
-6.7%
31
Revenue Multiples
EBITDA Multiples
Sector
2018E
2019E
2018E
2019E
Health IT
4.9x
4.2x
15.6x
14.3x
CRO
2.7x
2.5x
15.0x
13.5x
Payers
0.7x
0.6x
11.6x
8.3x
PBM
0.6x
0.5x
8.6x
8.0x
Healthcare Services
1.4x
1.3x
8.9x
8.9x
HIT & Payer Services
1.0x
1.0x
10.0x
8.9x
Healthcare Capital Markets
The Health IT IPO market has all but dried up in the last two years. 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 and 2018. While the US market has not seen any IPOs since
2016, there were 7 non-US based IPOs in 2018 (Renalytix, 111 Group, MaxQ AI, Voluntis, Qualitas,
Ping An Good Doctor, Huami).
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.
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Copyright 2019 Healthcare Growth Partners
0
2
4
6
8
10
2013
2014
2015
2016
2017
2018
IPOs
Healthcare Capital Markets
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.
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Copyright 2019 Healthcare Growth Partners
Sector Components
Health IT (HIT)
Allscripts - NAS:MDRX
Athenahealth - NAS:ATHN [Private as of 11/30/18]
Benefitfocus - NAS:BNFT
Care.com - NYS:CRCM
Castlight Health - NYS:CSLT
Cerner - NAS:CERN
Computer Programs & Systems - NAS:CPSI
Connecture - PINX:CNXR [Private as of 4/26/18]
Cotiviti - NYS:COTV [Acquired 8/27/18]
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
Model N - NYS:MODN
NantHealth - NAS:NH
NextGen NAS:NXGN
NRC Health - NAS:NRC
Omnicell - NAS:OMCL
Oneview Healthcare - ASX:ONE
Orion Health Group - NZE:OHE
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
Aetna - NYS:AET [Acquired 11/28/18]
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
DXC Technology - NYS:DXC
Conduent - NYS:CNDT
Huron Consulting Group - NAS:HURN
CBIZ - NYS:CBZ
DST Systems - NYS:DST [Acquired 4/16/18]
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
Express Scripts Holding - NAS:ESRX [Acquired 12/20/18]
Rite Aid - NYS:RAD
Walgreens Boots Alliance - NAS:WBA
Healthcare Services - Constituents
Amedisys - NAS:AMED
Brookdale Senior Living - NYS:BKD
Civitas Solutions - NYS:CIVI
Community Health Systems - NYS:CYH
Encompass Health Corp - NYS:EHC
Envision Healthcare - NYS:EVHC [Private as of 10/11/18]
HCA Management Services - NYS:HCA
Kindred Healthcare - NYS:KND [Acquired 7/2/18]
Laboratory Corporation of America Holdings - NYS:LH
LifePoint Health - NAS:LPNT [Acquired 11/16/18]
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
33
Macroeconomics
2018 Macroeconomic and Market Summary
2018 for the stock markets will be remembered for its extreme volatility. The stock market experienced
its most volatile year in 2018 since the financial crisis of 2008, setting record highs in September and
ending with a turbulent crash in December which saw the worst yearly losses since 2008. This volatility is
largely attributed to President Trump's trade war, signs of global economic slowdown, political
dysfunction,
inflation fears, and concern around rising interest rates. The year ended with the
government shutdown signaling a continuation of 2018's volatility as we enter the new year.
The S&P 500 closed at an all-time record of 2,930 on September 20, and ended the year down 6.2%. The
index moved up or down more than 1% nine times in December alone and 64 times during the year,
compared to eight times in all of 2017. Similarly, the NASDAQ ended the year down 3.9% and the Dow
Jones ended down 5.6%. Similar (and even worse) swings were felt around the world and few asset
classes were spared the volatility. Oil prices experienced short-lived highs in October, only to tumble in
the 4th quarter. As expected, the Federal Reserve raised interest rates in December. However, the hike
was coupled with an indication of only two more increases in 2019 (lower than the expected three), and
slightly lowered economic growth forecasts, spooking investors and sending stocks sliding in response.
For Q4 2018, out of 106 S&P 500 companies, 72 have issued negative EPS guidance, and 34 have issued
positive EPS guidance, according to the data provider FactSet. Companies issuing negative guidance
account for 68% which, while still below the 5-year average of 72%, demonstrates a growing negative
sentiment compared to the 57% for 1H.
The US IPO market hit a 4-year high with 190 IPOs and $47 billion in proceeds, 32% more than 2017.
Biotech companies drove the surge, with Chinese issuers flocking to US markets. The year featured ten
billion-dollar IPOs and notable players included AXA Equitable, Spotify, ADT, Dropbox, and Eventbrite.
Additionally, 38 tech companies were valued at $1 billion or more at the time of their IPOs, the most to
do so since the height of the dot-com boom. Companies to watch for in 2019 include Uber, Lyft, and
Pinterest.
2018 ended up being a banner year for the Venture Capital industry, with $120.9 billion deployed across
8,948 US venture deals, surpassing the previous record of $100 billion in 2000. Not as impressive, global
M&A deal value amounted to $3.88 trillion, less than 5% higher than 2017. This slowdown from the
impressive rate in 1H is attributed to the escalating trade dispute and increased market volatility.
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Copyright 2019 Healthcare Growth Partners
-15%
-10%
-5%
0%
5%
10%
15%
20%
12/31/2017
3/31/2018
6/30/2018
9/30/2018
12/31/2018
DJIA
S&P 500
Nasdaq
Health IT Headlines
Overview
Notable headlines from 2018 are outlined in the following pages on a quarterly basis. The
headlines in 2018 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
CMS unveils new voluntary bundled payment program
The Bundled Payments for Care Improvement (BPCI) Advanced model is the first advanced payment model
launched by the Centers for Medicare & Medicaid Services under the Trump administration, and includes 32
clinical care episodes for participating providers to choose from, according to an announcement from CMS.
Twenty-nine of the care episodes included in the model are inpatient, while the remaining three are outpatient,
according to CMS. Care episodes in the model include major joint replacement, spinal fusion and both inpatient
and outpatient percutaneous coronary intervention.
MedPAC Sinks MIPS, Recommends Alternative Program
The Medicare Payment Advisory Commission (MedPAC) voted 14-2 to in favor of killing the Merit-based Incentive
Payment System (MIPS) and replacing it with an alternative model of reimbursement. While the numbers appear
to signal a strong consensus for the proposed recommendations, a handful of members who voted to nix the
program expressed hesitation.
Trump signs stopgap funding bill with CHIP funding, tax delays
A short-term spending bill funding the federal government through Feb. 8 was signed into law by President
Donald Trump on January 22nd, ending a three-day shutdown. The measure, approved by the Senate and House
earlier Monday, will also extend funding for the Children's Health Insurance Program for six years, suspend the
medical device and health insurance taxes through 2019, and delay the tax on high-cost health plans through
2021.
Rising medical care, drug costs drive growth in health care spending
A report from the Health Care Cost Institute found health care spending for people with employer-sponsored
health insurance rose 4.6% from 2015 to 2016, even though utilization has remained steady or fallen. Spending on
brand-name prescription medications increased 110% between 2012 and 2016, but utilization fell 38%, while the
average price for surgical admissions rose 30% even as utilization dropped 16%, the report shows.
Partnership aims to disrupt health care
Amazon, Berkshire Hathaway and JPMorgan Chase & Co. are partnering on a new venture designed to cut
spending on health care while improving services for their US workforces. The independent venture will initially
focus on technology designed to simplify and improve the transparency and quality of health care, the companies
said.
Roche to acquire Flatiron Health for $2.1 billion
Flatiron's conceit has been that large amounts of data could be used to speed up and, in some cases, replace the
arduous process of conducting clinical trials where patients are randomly assigned to one treatment or another,
allowing them to be compared. The data space has heated up as the Food and Drug Administration, spurred by
pressure from Congress, has expressed interest in using such "real-world data" in the drug approval process. The
FDA itself has been one of Flatiron's collaborators.
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Copyright 2019 Healthcare Growth Partners
Health IT Headlines
Q1 Headlines, cont'd
Medtronic Moves to a New Health-Care Model: Pay Only if It Works
Medtronic, the world's largest medical-device maker, specializing in such products as implantable cardiac devices
and insulin pumps, is increasingly signing supply contracts with customers that adjust prices based on how well the
products work in patients, rather than simply having the customer pay a fixed per-unit cost regardless of a device's
performance in individual patients.
Fed initiative to put patients in control of their health data
The Centers for Medicare and Medicaid Services announced on March 6 at the HIMSS18 conference in Las Vegas
the launch of the MyHealthEData initiative, which CMS Administrator Seema Verma claimed is the first time any
administration has set in motion a coordinated initiative to truly make patients the focus of the healthcare system
by using the federal government's full authority to ensure providers and insurers give patients control of their
medical records.
Cigna Is Buying Express Scripts in a $54 Billion Health Industry Deal
Cigna agreed to buy Express Scripts Holding for $54 billion in cash and stock, another move toward consolidation
between U.S. health insurers and the companies that oversee patients' drug benefits. The acquisition is a shakeup
for the industry that runs prescription drug programs for insurers and employers, negotiating prices with
drugmakers and sometimes delivering treatments directly to patients. Express Scripts, which manages plans
covering more than 100 million people, and its rivals are becoming more aggressive with tactics to control costs,
increasingly denying coverage of some drugs or requiring high co-payments for expensive treatments.
Walmart talking with Humana on closer ties; acquisition possible: sources
Should the talks lead to a tieup, it would be the latest deal to bring together a retail chain and a health insurer in
the last few months, following CVS Health Corp's $69 billion deal to acquire Aetna Inc and Cigna Corp's $54 billion
deal to buy Express Scripts Holding Co. Walmart approached Humana earlier this month and the deliberations are
preliminary, two of the sources said. While the conversations have focused on new partnerships, an acquisition of
Humana by Walmart is also something being discussed, the sources added.
Q2 Headlines
Trump administration eases ACA essential health benefit requirements
The Centers for Medicare and Medicaid Services (CMS) released proposed payment policies for fiscal year 2018
that aim to "reduce burdens for hospitals so they can focus on providing high quality care for patients," CMS
Administrator Seema Verma said. The proposed rule would result in 2.9% higher inpatient operating prospective
payments, reduce payments to long-term hospitals by nearly 3.75%, and relax clinical quality measure reporting
standards for hospitals with an electronic health record system.
CMS proposes new payment model for skilled nursing facilities
The CMS has proposed a value-based payment model for skilled nursing facilities that would increase Medicare
payments to participating providers, link reimbursement to health outcomes, ease regulatory burdens and develop
new transparency requirements. The agency also proposed updates to rates and payment policies for inpatient
rehabilitation facilities, inpatient psychiatric facilities and hospice care.
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Copyright 2019 Healthcare Growth Partners
Health IT Headlines
Q2 Headlines, cont'd
Trump targets Medicare, PBMs in plan to lower drug prices
The Medicare program could soon see major policy changes by the Trump administration in its quest for lower
drug prices, and not everyone is happy. The administration's long-promised blueprint to lower drug prices was
not short on proposals to the federal program. Among the many provisions listed include value-based
arrangements for drug pricing, more transparency on prescription drug prices, and possible changes for pharmacy
benefit managers. HHS Secretary Alex Azar said the administration is looking at allowing private payers to
negotiate reimbursement for Medicare Part B drugs used in hospitals and doctor's offices. "More broadly, the
president has called for me to merge Medicare Part B drug payments into Part D, where negotiation has been so
successful," he said.
Trump administration says it won't defend key provisions of ACA
Legislation that repealed the penalty associated with the requirement that most Americans enroll in health
coverage has made the mandate unconstitutional, the Justice Department wrote in a brief filed at a Texas court
June 7th. The tax law passed last year also nullifies the Affordable Care Act's provisions that prevent coverage
denials for people with pre-existing conditions and block insurers from charging people in the same community
different rates depending on their health status, age, gender and other factors.
White House announces plan to reorganize HHS, other federal agencies
The White House Office of Management and Budget has proposed integrating the Supplemental Nutrition
Assistance Program into HHS and renaming the agency the Department of Health and Public Welfare as part of a
sweeping plan to reorganize the federal government unveiled June 21. The proposal, which faces tough odds of
obtaining approval in Congress, also calls for the creation of the Council on Public Assistance, which would
supervise food stamps, Medicaid and other programs and have the authority to impose uniform work provisions in
those programs.
Amazon buys PillPack, an online pharmacy, for just under $1B
A week after appointing a CEO for its healthcare joint venture with Berkshire Hathaway and JPMorgan, Amazon
announced an acquisition that underscores how it also hopes to have a more direct and more commercial
role in the world of healthcare in the coming years. The company has purchased PillPack, an online pharmacy the
lets users buy medications in pre-made doses. The Boston-based startup PillPack primarily caters to customers
who take multiple medications. PillPack streamlines delivery of prescription and over-the-counter medications by
pre-sorting them into handy dose packets sent directly to customers' doors nationwide in monthly supplies. The
company boasts that it works with doctors and insurance companies to manage refills and cost coverage on
customer's behalf. To do so, it holds pharmacy licenses in all 50 states, developed proprietary pharmaceutical
software, and is an in-network pharmacy with most pharmacy benefit managers, including Medicare Part D plans
features that were likely eye-catchers for Amazon. News of the deal rattled drug retailers, who have long feared
Amazon's entry into their realm. Shares of Walgreens, CVS, and Rite Aid plunged the day of the announcement,
collectively losing $12.8 billion, according to CNBC.
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Health IT Headlines
Q3 Headlines
CMS suspends $10.4B in risk adjustment payments to insurers
CMS announced it was freezing billions in risk adjustment payments to insurers on the ACA marketplace, citing a
New Mexico court ruling from March. AHIP said the decision would create more market uncertainty and increase
premiums.
Healthcare issues to place Kavanaugh nomination in path of political buzzsaw
With the announcement by President Trump that he's nominating Brett Kavanaugh for a position on the Supreme
Court, the partisan battle will be fierce in the weeks ahead. Key healthcare issues to be debated include abortion,
the Affordable Care Act, and cases involving the federal government's role in influencing medical care and
technology.
ResMed, Verily to Form Joint Venture to Help Reach Millions of Untreated Sleep Apnea Sufferers
Combining ResMed's expertise in sleep apnea and Verily's advanced health data analytics technologies, the U.S.-
based joint venture will study the health and financial impacts of undiagnosed and untreated sleep apnea, and
develop software solutions that enable healthcare providers to more efficiently identify, diagnose, treat and
manage individuals with sleep apnea and other breathing related sleep disorders.
CMS proposes new rule to boost telehealth payments
In a move that Centers for Medicare and Medicaid Services Administrator Seema Verma described as among "the
most significant reductions in provider burden undertaken by any administration," CMS proposed a new rule
intended to make big strides in telehealth, documentation requirements and interoperability. On the telemedicine
side, the proposal would mean CMS will begin paying physicians for "brief check-ins" via telemedicine as well as
remote evaluation of images and videos taken by patients. The proposal isn't carte blanche for telemedicine
reimbursement, but it is fairly open-ended. Notably, it would allow providers to bill for a telemedicine check-up
that neither stems from nor is followed up by an in-person visit.
CMS to let MA plans negotiate lower prices for Part B drugs
The CMS announced August 7 that it will be allowing Medicare Advantage plans to negotiate lower prices for
doctor-administered drugs covered under Part B as part of the Trump administration's broader effort to cut
prescription drug costs. Effective next year, MA plans will be permitted to use a cost-saving tool called step
therapy, which gives payers the option to offer patients the most-preferred and often least expensive therapy first,
before moving them to a more expensive drug if the initial treatment is not effective.
CMS proposes major changes to Medicare's ACO program
The CMS has proposed overhauling Medicare's Accountable Care Organization program, with proposed changes
that include limiting from six years to two years the amount of time an ACO can remain in an upside-risk
arrangement, authorizing termination of ACOs with multiple years of weak financial performance and allowing
certain ACOs under performance-based risk to offer incentives to patients for taking steps to improve their health.
The CMS expects the proposal, estimated to save Medicare $2.2 billion over 10 years, to result in the dropping out
of about 107 ACOs.
Amazon, Google, IBM, Microsoft, Oracle and Salesforce pledge to remove interoperability barriers
A broad coalition of technology giants took the stage in an unscheduled session on August 13th at the Blue Button
2.0 Developer Conference in the White House. Specifically, Amazon, Google, IBM, Microsoft, Oracle and Salesforce
came together to pledge to remove interoperability barriers. While the companies did not delve into further
details, Microsoft Corporate Vice President Peter Lee said his company is committed to removing all barriers to the
interoperability of health data.
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Health IT Headlines
Q3 Headlines, cont'd
Senators confront Azar on drug pricing comments after PBMs refute his testimony
In a letter to Department of Health and Human Services Secretary Alex Azar, Sens. Elizabeth Warren, D-Mass., and
Tina Smith, D-Minn., questioned the accuracy of Azar's testimony in which he said PBMs threatened to take drugs
off their formulary if manufacturers lowered the price. Warren and Smith subsequently wrote to nine PBMs and
drug distributors requesting they respond to Azar's "extremely disturbing allegations." All nine companies denied
Azar's claims.
Anthem partners with Walmart to expand access to over-the-counter drugs
The new partnership significantly expands access to OTC drugs and supplies by allowing members to make
purchases at any of Walmart's 4,700 locations.
"The program with Walmart will allow consumers to pick the
shopping method that best fits their lifestyle and the initiative is expected to significantly reduce the out-of-pocket
cost burden for those enrolled in Anthem's affiliated MA health plan," Anthem spokesperson Hieu Nguyen said in
an email. Walmart says 90% of Americans live within 10 miles of a Walmart. The partnership will also give
members access to free two-day shipping on orders $35 or more.
Cigna, Express Scripts shareholders approve $67B deal
Cigna's purchase of Express Scripts cleared a key hurdle, gaining approval from shareholders in both companies
after a public spat with activist investor Carl Icahn. The deal now faces clearance by federal antitrust regulators.
Genevieve Morris resignation could signal trouble with VA EHR plans
The Department of Veterans Affairs has lost a key IT architect who had been working to ensure that the VA's
planned rollout of a $10bn Cerner electronic health record system comes off without a hitch.
The abrupt
resignation raises questions as to how that rollout is progressing.
Federal court nixes CMS overpayment rule, handing a big win to Medicare Advantage insurers
Medicare Advantage insurers scored a significant legal victory on Friday when a D.C. federal court struck down a
2014 rule requiring payers to report and return overpayments. The judgment could have significant implications
for fraud cases involving Medicare Advantage diagnosis codes.
Cerner President Zane Burke to step down this fall
Cerner President Zane Burke, who first joined the company in 1996 and held several executive roles there before
being named president, will step down on Nov. 2. John Peterzalek, Cerner's executive vice president of worldwide
client relationships, will take on Burke's responsibilities, with the title of Chief Client Officer, the company said.
Apple Watch Series 4 will have FDA-cleared ECG, fall detection
Apple Chief Operating Officer Jeff Williams announced at Apple's special event in Cupertino that the company has
received FDA clearance for both an atrial fibrillation-detecting algorithm and an ECG that will be built into the
company's Series 4 Apple Watch, due to start shipping September 21. Williams announced several other new
health features as well, most notably fall detection, which takes advantage of the device's new accelerometer and
gyroscope.
Elliott Management puts brakes on athenahealth acquisition, causing shares to tumble
The ongoing saga of athenahealth and Elliott Management continues. Shares of the cloud-based health IT
company fell sharply Tuesday morning on news that the hedge fund which has recently been seen as the most
likely candidate to acquire the company after a long and contentious courtship has reportedly recoiled from the
$160 share price.
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Copyright 2019 Healthcare Growth Partners
Health IT Headlines
Q4 Headlines, cont'd
CMS proposes to require drug manufacturers to disclose prices in ads
The Centers for Medicare & Medicaid Service issued a proposed rule aimed at increasing drug price transparency
and reducing the price of prescription drugs and biological products to consumers by requiring drug
manufacturers to include list prices in all direct-to-consumer television advertisements of prescription drugs and
biological products for which Medicare or Medicaid reimbursement is available. The specific drugs that would
require list price disclosure are those that are used for a 30-day regimen or for a typical course of treatment.
Healthcare.gov system breach may have exposed info of 75K people
The CMS said it has detected a breach in a government computer system used by agents and brokers to assist
consumers with health plan enrollment through the Affordable Care Act exchange, and it potentially exposed the
personal information of roughly 75,000 individuals. The agency said the system has been disabled to implement
new security measures and could be restored within seven days.
athenahealth Enters Definitive Agreement to be Acquired by Veritas Capital For $135 Per Share in Cash
athenahealth, Inc. (NASDAQ: ATHN), a leading provider of network-enabled services for hospital and ambulatory
customers nationwide, Veritas Capital ("Veritas") and Evergreen Coast Capital ("Evergreen"), announced that they
have entered into a definitive agreement under which an affiliate of Veritas and Evergreen will acquire
athenahealth for approximately $5.7 billion in cash.
CVS closes $69B acquisition of Aetna in a 'transformative moment' for the industry
Aetna is now officially part of CVS Health. The two companies closed the $69 billion deal on Wednesday, finishing
off a vertical merger that makes one of the largest healthcare giants even larger.
"Today marks the start of a new day in healthcare and a transformative moment for our company and our
industry," CVS Health President and CEO Larry Merlo said in a statement. "By delivering the combined capabilities
of our two leading organizations, we will transform the consumer health experience and build healthier
communities through a new innovative healthcare model that is local, easier to use, less expensive and puts
consumers at the center of their care."
U.S. healthcare spending growth slows for second year in a row
Healthcare spending growth in the United States slowed for the second year in a row in 2017, mainly due to slower
spending growth for hospital care, physician and clinical services as well as retail prescription drugs, according to a
report from the U.S. Centers for Medicare and Medicaid Services. National health spending grew at a rate of 3.9
percent to $3.5 trillion, compared with 4.8% in 2016 and 5.8% in 2015. The low rate of spending growth in 2017
was similar to the average annual growth rate of 3.9 percent seen between 2008 and 2013.
Federal court rules Obamacare unconstitutional but the law stands for now
A federal judge in Texas rules that the Affordable Care Act is unconstitutional because Congress eliminated the
penalty for people who don't sign up for health insurance. He sided with the White House-supported lawsuit
brought by 20 Republican state attorneys general, which argued that if the penalty is unconstitutional, then so is
the entire ACA. The Trump administration filed a brief asking the court to overturn the ACA's ban on preexisting
conditions, opening the door for insurers to once again price coverage based on medical history. The White House
also opted not to defend the ACA in court, an unusual move for the executive branch that traditionally defends
existing laws. The ruling did not include an injunction, however, so nothing will change until higher courts review
the ruling.
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Copyright 2019 Healthcare Growth Partners
About Healthcare Growth Partners
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 $2 billion
in value since 2007.
Our passion for healthcare inspires us to not only create value for our clients, but to also
generate broad, overarching improvements to the functionality and sustainability of health.
With our focus, we deliver knowledgeable, honest and customized guidance to select
clients looking to execute high value health IT, health information services, and digital
health transactions.
Contact Information
Christopher McCord
Managing Director
chris@hgp.com
2001 Kirby Drive, Suite 814
Houston, TX 77019
(713) 955-7935
www.hgp.com
Securities offered through HGP Securities, LLC, member FINRA & SIPC, broker-dealer affiliate of Healthcare
Growth Partners, LLC.
Sources of Information:
Pitchbook, CMS, Company press releases, Company SEC filings, Health Data Management, Healthcare Growth
Partners database, HealthLeaders Media, HIStalk, Mercom Capital Group, Modern Healthcare, The New York
Times, Mergermarket, FierceHealthcare, StartUp Health, Rock Health, Dealogic, and The Wall Street Journal.
These statistics are presented for informational purposes only. While the information presented has been obtained
from sources deemed to be reliable, no representation or warranty, express or implied, is made as to the accuracy
or completeness of such information.
40
9
Copyright 2019 Healthcare Growth Partners
41
HGP Transaction Experience
10
Copyright 2019 Healthcare Growth Partners
Copyright 2019 Healthcare Growth Partners
42
HGP Transaction Experience
10
43
HGP Transaction Experience
10
Copyright 2019 Healthcare Growth Partners
Appendix A
Strategic M&A Highlights
44
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Allscripts
Healthcare
Solutions
Practice Fusion
Developer of a cloud-based electronic health record (EHR) platform designed
to connect doctors, patients and data to drive better health and save lives.
$100
Q1
Elsevier
Via Oncology
Developer of a healthcare software offering evidence-based, point-of-care
decision-making tools for oncology practices.
na
Q1
AXA Group
Maestro
Healthcare
Technology
Developer of an online employee health and benefits platform designed to
simplify and personalize how people shop, enroll and live with their benefits.
$155
Q1
Grifols
MedKeeper
Developer of mobile and web based software applications designed to
improve efficiency and compliance in hospital pharmacy operations.
$200
Q1
StateServ
Medical
Network Medical
(dba HospiceLink)
Provider of medical cost and benefit management software intended to make
better business and provide better care.
na
Q1
Press Ganey
Associates
Patient
Experience
Business of
HealthStream
Provider of patient experience services that ensure that the feedback or
complaints of every patient reaches the respective healthcare entity.
$65.5
Q1
WebPT
BMS Practice
Solutions
Provider of a physical therapy software designed to manage billing, collection
and reimbursement services for rehabilitation providers
na
Q1
Roche Holding
AG
Flatiron Health
Developer of a database platform designed to organize the oncology
information and make it useful for patients, physicians, life sciences and
researchers.
$2,100
Q1
Hyland Software
Allscripts
OneContent
Provider of clinical and financial services supporting the full scope of care
delivery processes.
$235
Q1
R1
Intermedix
Provider of revenue cycle management, practice management and data
analytics services to the healthcare industry.
$460
Q1
Inovalon
Holdings
ABILITY Network
Provider of technology platform that provides core connectivity,
administrative, clinical, and quality analysis, management, and performance
improvement capabilities.
$1,200
Q1
Cognizant
Technology
Solutions
Bolder Healthcare
Solutions
Provider of healthcare revenue cycle management services.
$485
Q2
Netsmart
Technologies
Change
Healthcare (Home
Care and Hospice
Solutions)
Provider of post-acute care services. The company integrates, shares and
analyzes clinical and financial data available, using a suite of software
applications, enabling home health and hospice agencies to share clinical,
financial and administrative data at nominal costs.
$167.5
Q2
AMN Healthcare
Services
MedPartners
Provider of staffing services in the health information management (HIM)
sector including case management and quality care services, clinical
documentation improvement, coding compliance, and audit services.
$195
Q2
Health Catalyst
Medicity
Developer of a data exchange platform that provides clinical data exchange,
health information exchange, business intelligence and patient engagement
services.
na
Q2
Allscripts
Healthcare
Solutions
HealthGrid
Provider of a mobile patient engagement platform that offers pre-care
notifications, point-of-care registration and post-care follow-up.
$110
Q2
MTBC
Orion HealthCorp
Provider of revenue cycle management services intended to maximize revenue
while reducing operating expenses and creating an efficient workflow.
$12.6
Q2
IQVIA
Advanced Health
Media
Provider of regulatory compliance management systems and logistics services
for the pharmaceutical industry.
$127.5
Q2
ResMed
HEALTHCAREfirst
Provider of health management software services that support managing
operations such as electronic medical records, billing and coding, and revenue
cycle management operations.
na
Q2
Sun Life
Financial
Maxwell Health
Provider of an employee benefits management platform designed to simplify
benefits and human resources.
na
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Strategic M&A Highlights
45
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2 WebMD Health
Corp.
Jobson
Healthcare
Information
Provider of marketing services, information databases, publications, medical
education programs, events, and websites for the healthcare sector.
na
Q2
Alight Solutions
Compass
Professional
Health Services
Provider of a professional healthcare service platform intended to empower
employees to make smarter healthcare decisions.
na
Q2
Medidata
Solutions
Shyft Analytics
Provider of an analytics cloud platform that offers analytical insights in order
to provide new ways to commercialize drugs and measure patient outcomes.
$195
Q2
Quest Analytics
BetterDoctor
Provider of doctor searching platform that helps to validate and deliver
accurate provider data of health plans, health systems, etc.
na
Q2
Verscend
Technologies,
Inc.
Cotiviti
Provider of payment accuracy and analytics-driven services that helps payers,
other risk-bearing healthcare organizations and retailers achieve their business
objectives.
$4,930
Q2
Amazon
PillPack
Provider of online pharmacy services designed to offer medications in
personalized packets.
$1,000
Q2
Exlservice
Holdings
SCIO Health
Analytics
Provider of health analytic services that offer business services and insights in
the areas of payment integrity, risk and care management, value based benefit
design, consumer engagement and consumer segmentation.
$236.5
Q3
Datix
RL Solutions
Developer of a patient safety software.
na
Q3
Bracket
CRF Health
Developer of electronic clinical outcome assessments (eCOA) platform for
home and site-based phase I-IV clinical trials
$1,000
Q3
Global Payments
AdvancedMD
Provider of cloud-based practice management, electronic health records and
revenue cycle management services for the independent physician practice
market.
$700
Q3
Best Buy
GreatCall
Provider of mobile based applications and devices for aging consumers.
$800
Q3
N. Harris
Computer
Corporation
Iatric Systems
Provider of report writing services, EMPI services, HIE services, interface engine
services, regulatory services, migration services, program and project
management services, helping hospitals enhance their IT investments.
na
Q3
RevSpring
APEX Revenue
Technologies
Provider of a complete suite of billing cycle services to enable customers to
improve efficiency, reduce costs an increase in cash flow.
na
Q3
Evolent Health
New Century
Health
Provider of specialty benefit management services focused primarily on
oncology and cardiology.
$217
Q3
Mitchell
International
Genex Services
Provider of cost containment and integrated care management services using
intelligent systems and 360-degree data analysis
na
Q3
TriMedx
TMX Healthcare
Technologies
(Aramark
divestiture)
Provider of healthcare technology services. The company offers repair and
maintenance services along with the outsourcing of clinical engineering
services to clinical equipment and healthcare facilities.
$300
Q3
Relias Learning
OnCourse
Learning -
Healthcare
Business
OnCourse Learning's Healthcare division delivers licensure, regulatory and
compliance education solutions throughout the Acute and Post-Acute
healthcare industries.
na
Q4
Oracle
goBalto
Developer of a cloud-based software designed to accelerate the speed of
clinical research.
na
Q4
Cedar Gate
Technologies
Global Healthcare
Alliance
Provider of advisory services for prospective bundled payment arrangements,
opportunity assessment, alternative payment models, strategic consultation,
operational support, and value-based healthcare optimization systems.
$70
Q4
DXC Technology
Molina Medicaid
Solutions
Provider of health care tool management services that include providing
design, development, implementation and business process outsourcing
services to state governments for the software tool used to manage
procedures and computer processing operations.
$220
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Strategic M&A Highlights, cont'd
46
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q4
Scribeamerica
PhysAssist
Scribes
Provider of scribe services. The company provides clerical assistant staffing and
medical record services for hospitals in United States.
$160
Q4
OpenText
Liaison
Technologies
Provider of cloud-based data platform as a service intended to combine
integration and data management under one platform.
$310
Q4
ResMed
MatrixCare
Developer of a cloud-based long-term post-acute care software intended to
leverage technology to improve quality of life for seniors.
$750
Q4
Premier
Stanson Health
Developer of a clinical decision support platform designed to reduce low-value
and unnecessary care.
$66.5
Q4
Medtronic
Nutrino
Developer of a virtual nutritionist application designed to offer personalized
meal recommendations based on a user's profile, goals, habits, and taste.
$100
Q4
Virgin Pulse
SimplyWell
Provider of workplace wellness programs intended to improve the health of
populations through educating, engaging and empowering individuals to live
healthier lives.
na
Q4
ResMed
Propeller Health
Operator of a digital health company intended to improve the management of
chronic respiratory disease.
$225
Q4
Meditech
Centennial
Computer
Corporation
Provider of EMR technology.
na
Q4
Tivity Health
Nutrisystem
Provider of weight-management products and services including pre-packaged
food and diet counseling.
$1,300
Q4
Change
Healthcare
PokitDok
Provider of API platform that enables third-party developers to process eligibility
checks, claims, scheduling, payments, and other transactions.
na
Q4
Grand Canyon
Education
Orbis Education
Provider of collaborative nursing educational services intended to alleviate
nursing workforce shortages through programs focused on academic quality
and student preparedness.
$362.5
Q4
3M
M*Modal
Technology
Business
Developer of a cloud-based speech recognition solution that transforms voice
into text data to capture the complete patient story and codify the doctor's
narrative
$1,000
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Financial Sponsor Buyout Highlights
47
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q1
Undisclosed
Caring.com
Provider of online services which include elder care information and resources
including personalized guidance, articles, and other tools.
na
Q1
NovaQuest
Capital
Management,
RTI International
Clinical Ink
Developer of an eSource technology designed to revolutionize clinical research
by eliminating paper source documents.
na
Q1
Francisco
Partners
Management
Connecture
Provider of a Web-based sales, service and process automation platform
designed to streamline health insurance distribution.
$111.9
Q1
Pamplona
Capital
Management
GetWellNetwork
Provider of patient engagement solutions that help healthcare providers engage,
educate and empower patients.
na
Q1
HGCapital
MediFox
Developer of enterprise system software for outpatient and inpatient care
providers and therapy practices in Germany. Services include resource and route
planning, care and support documentation, management information systems,
billing, factoring and administration services.
na
Q1
Clayton, Dubilier
& Rice
NaviHealth
Provider of post-acute care management services including benchmarking and
analytics, and clinical design and support by utilizing evidence-based protocols
and technology-enabled services.
$650
Q1
HGCapital
Orion Health
Group
Developer of healthcare information technology engaged in sales, development,
implementation, hosting and support of healthcare software services
$255
Q1
K1 Capital
PerfectServe
Provider of a clinical communication platform designed to connect staff with
physicians
na
Q1
Marlin Equity
Partners
Virgin Pulse,
RedBrick Health
Developer of employee health engagement platform and employee-centric
tools.
Provider of technology-enabled enterprise services designed to assist customers
in adopting healthier behaviors and making smarter healthcare decisions.
$156
Q1
Accel-KKR
I-Med S.A.
Operator of a digital health platform that integrates different constituents that
participate in the Chilean healthcare market and generates an agile, simple and
patient-centered healthcare for the customers
$82.5
Q1
VSS
Caravan Health
Provider of care advisory services for Medicare ACO's.
na
Q1
Clearlake Capital
Group
ProVation
Medical
Provider of procedure documentation and clinical decision support solutions for
hospitals and ambulatory surgery centers.
$180
Q1
Renovus Capital
Partners
Continuing
Education
Alliance, and
Practicing
Clinicians
Exchange
Provider of an online healthcare educational platform designed to meet the
needs of clinicians. The company offers cardiovascular, respiratory, neurology
and urology courses.
na
Q1
Stone Point
Capital
Genex Services
Provider of cost containment and integrated care management services using
intelligent systems and 360-degree data analysis.
na
Q1
Water Street
Healthcare
Partners, JLL
Partners
Dohmen Life
Science Services
Provider of medical communication services including outsourced services and
capabilities in the areas of a patient support, supply chain, compliance, finance,
and technology to biopharmaceutical companies.
$537.4
Q1
Parthenon
Capital Partners
RedCard
Systems
Provider of claims communications, payments and enrollment services.
na
Q1
Parthenon
Capital Partners
Trinity Partners
Provider of life sciences consulting services intended to provide strategic
insights and analysis for precise decision making.
na
Q1
Rothschild & Co,
TA Associates
Datix
Developer of a cloud based patient safety software.
na
Q2
LLR Partners
Medbridge
Education
Provider of an education platform that offers evidence-based clinical and
professional education and home rehabilitation programming.
na
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Financial Sponsor Buyout Highlights
48
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q2
Great Hill
Partners
Vatica Health
Developer of a cloud-based proprietary software that connects healthcare
stakeholders to optimize quality and manage risk, leveraging proprietary
technology to seamlessly integrate office workflow.
na
Q2
Main Capital
Partners
RVC Medical IT
Operator of a healthcare information technology company with a focus on
picture archiving and communication system (PACS) and Vendor Neutral
Archive (VNA) services.
na
Q2
Water Street
Healthcare
Partners, JLL
Partners
Triplefin
Provider of a customizable program which, driven by its digital platform,
incorporates a modular design which patients and pharmacies to improve
outcomes and to remove brand challenges with access, acquisition and
adherence.
na
Q2
Waud Capital
Partners
Pharmacy
Partners
Holdings
Provider of pharmacy services including patient care, customer service and
management services to infusion clinics and physician practices.
na
Q2
Vista Equity
Partners
Allocate
Software
Developer of workforce management software intended to help healthcare
institutions manage their staff safely and efficiently so that they can deliver
exceptional care to all their patients.
$33.9
Q2
Stone Point
Capital
Mitchell
International
Developer of collision and medical claims software.
na
Q2
Tianjin Dazhen
Asset
Management,
East Ocean
Ventures
RADLogics
Developer of a vendor-and modality-agnostic software analytics platform
designed to increase radiologist's productivity and accuracy.
na
Q2 Montagu Private
Equity
Maincare
Solutions
Developer of administrative software and technology services that provide
medical imaging, billing, business intelligence and human resources services,
and assisting academic hospitals with electronic patient records and
information.
na
Q2
Aquiline Capital
Partners
Aspirion Health
Resources
Provider of a claim management system designed to offer assistance to
hospitals and hospital systems on accident cases.
na
Q2
New Capital
Partners
Collect Rx
Provider of revenue-cycle-management services intended to reduce large
balance collection from patients.
na
Q2
Nautic Partners
PPS Analytics
Developer of electronic medical record (EMR) systems designed to transform
data into meaningful and actionable insights.
na
Q2 Norwest Venture
Partners
Target
PharmaSolutions
Performs clinical information research for diseases caused by Hepatitis C,
providing an opportunity to evaluate the impact of changing management
paradigms to the level of the individual patient.
na
Q2 Mainsail Partners
FairWarning
Developer of software that provides data protection and governance for core
applications, including electronic health records (EHRs), salesforce, & office 365.
$60
Q2
GPB Capital
Holdings
Health Prime
International
Provider of platform-agnostic revenue cycle management, electronic health
record, transcription, and practice management services.
$48
Q2
Veritas Capital
GE Healthcare
(Information
Technology
Division)
The division's services include enterprise financial management, ambulatory
care management and workforce management.
$1,050
Q2
Pamlico Capital
Connexin (dba
Office Practicum)
Developer of an EHR software developed to connect the community of
pediatricians with their patients to foster best practices and healthier lives.
na
Q2
Altaris Capital
Partners
Clearwater
Compliance
Provider of hospital and health system compliance and cyber risk management
services.
na
Q2
Insight Venture
Partners
CentralReach
Provider of EHR/PM software and developer of a specialized software focused
on Applied Behavioral Analysis (ABA) enabling autistic patients to treat aliments
through speech therapies, occupational therapies and PK-12 education.
na
Q2
General Atlantic Landmark Health
Provider of home-based medical care services intended to deliver
comprehensive care to patients wherever and whenever they need it.
na
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Financial Sponsor Buyout Highlights
49
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q3
The TWC Group,
Cerberus Capital
Management
Patriot
National
Provider of comprehensive technology and outsourcing services intended to
help insurance companies and employers mitigate risk, comply with complex
regulations and save time and money.
na
Q3
WindRose Health
Investors (fka
MTS Health
Investors)
basys
Provider of benefits administration software suites, web-based portals and
hosting services that deliver cost-effective and reliable health and pension
benefits processing, fund office administration, and reporting services.
na
Q3
Lightyear Capital,
Oak HC/FT
Partners
TheraNest
(Therapy
Brands)
Developer of mental and behavioral health practice management software.
na
Q3
Granite Bridge
Partners
The Wellness
Network
Owner and operator of health education including the Patient Channel, Newborn
Channel, Your NICU Baby, HeartCare Channel and MedSerenity Channel.
na
Q3
Vista Equity
Partners
Alegeus
Technologies
Developer and operator of a consumer healthcare funding platform.
na
Q3
Monroe Capital,
Level Capital
Partners
S&S
HealthCare
Strategies
Provider of health plan administration and claims processing services for a
variety of self-insured benefit plans, third party administrators, state and federal
exchanges, employer groups, insurance companies, and Medicare plans.
na
Q3
Main Capital
Partners
Vanad
Enovation
Provider of healthcare integration and robotic process automation solutions and
services intended to assist clients with their information exchange and
integration needs.
na
Q3
Madison Capital
Funding
Chemical
Computing
Group
Developer of molecular modeling software intended to discover, implement, and
validate the new scientific methodology.
$92.5
Q3
Paradigm
Outcomes
Adva-Net
Provider of addiction recovery, comprehensive pain and post-acute care
management services.
na
Q3
Ancor Capital
Partners
STATinMED
Provider of advanced outcomes research, consulting and statistical analysis for
pharmaceutical, biotechnology and health information companies.
na
Q3
Stella Point
Capital
Vereco
Manages all aspects of hospitals' print ecosystems, including clinical and
administrative print activity, equipment infrastructure and leasing.
na
Q3
The Carlyle Group
Sedgwick
Claims
Provider of claims processing and productivity management technology services.
$6,700
Q3
OMERS Private
Equity
Paradigm
Management
Services
Provider of complex and catastrophic medical case management services.
na
Q3
HealthEdge
Investment
Partners, Brook
Venture Partners,
Eagle Private
Capital
itrac
Provider of technology-enabled practice optimization applications to dental
practices including website design and hosting, direct mail campaigns, pay-per-
click advertising, reputation management, call tracking and analytics, and
continuing education
na
Q4
Pine Tree Equity
RevMD
Provider of revenue cycle management services including revenue cycle
outsourcing, early-out self-pay collections and insurance collections.
na
Q4
Clanwilliam
Group
Obsidian
Healthcare
Group
Operator of two healthcare companies allowing it to deliver both collaboratively
sponsored medical communications activities and medical education programs
across the globe.
na
Q4
Harbour Point
Holdings
Insight
Telepsychiatry
Provider of telepsychiatry services including assessment, screening, diagnosis,
consultations and medication management
na
Q4
TPG Capital
Q-Centrix
Developer of data management applications for hospital and healthcare
providers, intended to improve their safety and quality.
na
Q4
ChrysCapital
Gebbs
Healthcare
Solutions
Developer of revenue cycle management software designed for specific medical
billing, health information management and coding needs.
$140
Q4
GHO Capital
Validant
Provider of compliance and regulatory affairs consulting services.
na
11
Copyright 2019 Healthcare Growth Partners
Appendix A
Financial Sponsor Buyout Highlights, cont'd
50
Quarter
Acquiror
Seller
Seller Description
Deal Size
($mm)
Q4
Clearlake Capital
Group
Symplr
Provider of SaaS web-based vendor credentialing services.
$550
Q4
GI Partners, TA
Associates
Management
Netsmart
Technologies
Developer of technology that helps in the integration of patient information and
medical records, population health, billing, analytics, and management process
services.
$575
Q4
Vista Equity
Partners
Mindbody
Developer of business management software for yoga and Pilates studios, fitness
facilities, spas, salons and other retail clients.
$1,900
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
51
Quarter
Investor
Target
Target Description
Raise
($mm)
Q1
MidCap Financial, Claremont Creek Ventures,
Foresite Capital Management, Microsoft, TPG
Biotech, WuXi NextCODE, GV
DNAnexus
Developer of a cloud computing platform to
manage DNA sequence data.
$58
Q1
Temasek Holdings, EDB Investments, Arboretum
Ventures, 5AM Venture Management, Jazz
Venture Partners, Bridge Builders Collaborative
Pear
Therapeutics
Develops and offers digital therapies and
drug/software combinations to behavioral health
disorders.
$50
Q1
Westview Capital Partners
Jopari
Solutions
Provides integrated payment and compliance
solutions to worker's compensation, auto, and
health insurance industry payers.
na
Q1
GV, Oak HC/FT Partners, F-Prime Capital
Partners, Deerfield Management Company,
Polaris Partners
Quartet Health
Offers a platform to better connect the patients of
primary care physicians with mental health care
$40
Q1
Bristol-Myers Squibb, New Enterprise Associates,
Inova Strategic Investments, Co-win Healthcare
Fund, Helsinn Investment Fund, Windham
Venture Partners, Maryland Venture Fund
Personal
Genome
Diagnostics
Engages in the patient-specific analyses of cancer
genome using digital characterization and
monitoring technologies.
$75
Q1
Allianz X
American Well
Corporation
Operates as a telehealth services company. Operates
an online marketplace that offers software, services,
and access to clinical services.
$59.2
Q1
Susquehanna Growth Equity
eVive Health
The company engages in operating a platform
which uses predictive analytics to accurately identify
which benefits an employee needs and by merging
employee data with relevant external data.
$43
Q1
Five Arrows Principal Investments
CBA
Informatique
Provides software and education for French nurses.
$61.2
Q1
StartUp Health, Wanxiang Healthcare
Investments, Prolog Ventures, Digitalis Ventures,
7wire Ventures, AI Life Sciences Investments
CareDox
Operates a care coordination platform for parents
and schools to manage and share medical
information.
$16
Q1
Mainsail Partners
Bio-Optronics
Develops, deploys, and operates software products
and custom information technology solutions to
help healthcare professionals in managing and
optimizing workflow.
$30
Q1
SoftBank Capital, SBI Investment Co.
Ping An
Healthcare
Management
Provides support to China's public medical
insurance services and guidance on medical fees
with its health data system.
$1,000
Q1
Elevate Ventures, Mosaic Health Solutions,
HealthQuest Capital, Echo Health Ventures,
Cambia Health Solutions, Lewis & Clark Venture
Capital
Springbuk
Operates an employer health analytics platform for
brokers, vendors/clinics, and employers.
$20
Q1
Zaffre Investments, Mayfield, Seventure Partners
Zipongo
Provider of a digital nutrition platform designed to
improve health outcomes through personalized
dietary recommendations.
$35
Q1
Intermountain Healthcare
R1 RCM
Provides revenue cycle management services for
hospitals and healthcare providers.
$20
Q1
Ping An Ventures, OurCrowd
Tyto Care
Develops a handheld device to perform self-
examinations for remote diagnosis.
$25
Q1
Seventure Partners, Gilde Healthcare Partners,
GIMV NV, Lightstone Ventures, Medtronic, New
Enterprise Associates
Foundry
Innovation &
Research 1
(FIRE1)
Developer of novel remote monitoring device
designed to improve patient quality of life and
patient outcomes.
$49.6
Q1
NWS Holdings
Medopad
Developer of a remote patient monitoring
application, mobile technology and advanced data
analytics.
$28
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
52
Quarter
Investor
Target
Target Description
Raise
($mm)
Q1
Breyer Capital
PAIGE.AI
Engages in clinical diagnosis and treatment oncology
through use of artificial intelligence (AI) for treating
cancer.
$25
Q1
Battery Ventures
Curve Dental
Provider of SaaS-based dental practice management
software.
na
Q1
Advanced Power Electronics Corporation, SB
China Venture Capital
Codoon
Developer of wearable devices, including a wristband,
a second generatio bracelet, step counter, Bluetooth
body scale, Codoon Candy and Codoon Smile.
$20
Q1
BlockVC Fund, Blockchain Labo,
Blockchaininvest Hedge Fund, Dfund, Preangel,
Synco
Medicalchain
A blockchain-enabled telemedicine application
developer.
$20
Q1
Clal Insurance Enterprises Holdings Ltd. (TASE:
CLIS), Meitav DASH Investments Ltd (TASE:
MTDS)
OrCam
Provider of a portable artificial vision device designed
to help the visually impaired understand text and
identify objects easily.
$30.4
Q1
Lemhi Ventures, Ascension Ventures
Bind Benefits
Provider of online platform that focuses on
preventive care, primary care, specialty care and
chronic care related insurance services and provides
information regarding insurance coverage, pricing
and treatment options.
$70
Q1
Sun Life Financial, New Enterprise Associates,
Mubadala Investment Company, Maverick
Capital, The Founders Fund, GV, Health
Velocity Capital, Blue Cross and Blue Shield
Association, Sandbox Industries, Noro-Moseley
Partners
Collective
Health
Provider of self-insurance platform that offers
integrated administration of all health plans through
a single portal, gives clear guidance, live concierge
support and digital tools to find and manage care,
enabling users to get connected with medical,
pharmacy, dental, and vision plans, all at once.
$110
Q1
Dragoneer Investment Group
PointClickCare
Leading cloud-based EMR vendor for post-acute care
and senior living.
$146
Q1
Illumina, Kleiner Perkins Caufield & Byers,
Mayo Clinic, Sutter Hill Ventures, Warburg
Pincus, DFJ Growth
Helix
Provider of a consumer-facing human genome
platform created to empower every person to
improve their life through DNA.
$200
Q1
IVP, Redpoint Ventures
Hims
Provider of wellness products for men intended to
treat conditions such as baldness, erectile dysfunction,
skincare, and nutrition.
$40
Q1
aMoon Partners, Horizons Ventures Limited
Medial
EarlySign
Provider of an advanced AI-based algorithm platform
intended to improve patient management and non-
communicable disease management.
$30
Q1
Accomplice, The Durant Company, Mousse
Partners, National Football League Players
Association, NextView Ventures, Promus
Ventures, Thursday Ventures, Two Sigma
Ventures, UAE71 Capital
Whoop
A developer of an online health and fitness analytics
tool for athletes. The company's performance
optimization systems offer a continuous
understanding of strain and recovery to balance
training, reduce injuries and predict performance.
$25
Q1
Draper Fisher Jurvetson, Y Combinator, Tencent
Holdings, Khosla Ventures, Dolby Family
Ventures, Data Collective, Baidu Venture, B
Capital Group, Monsanto Growth Ventures
Atomwise
Develops artificial intelligence solutions for drug
discovery.
$45
Q1
Chartered Investment Managers Pte Ltd
ContinUse
Biometrics
Provider of a contactless biometric sensor platform
intended to continuously monitor physiological state
from a distance of up to several hundred meters.
$20
Q1
Hudson Bay Capital Management
BewellConnect
Developer of connected healthcare devices and
remote monitoring software designed to help one
take care of themselves and their loved ones.
$30
Q1
Alphabet, Johnson & Johnson
Verb Surgical
Developer of digital surgery platform includes
robotics, visualization, advanced instrumentation,
data analytics and connectivity.
$500
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
53
Quarter
Investor
Target
Target Description
Raise
($mm)
Q1
Rand Capital, F-Prime Capital Partners, Bain
Capital
Centivo
Provider of health insurance services designed to help
self-insured employers and their employees save
money and have a better experience.
$31
Q1
Venrock, The Founders Fund, Scifi VC,
Caffeinated Capital, Ev Williams Obvious
Ventures, Creandum, Playground Global
Virta Health
Develops and delivers individualized telemedicine
therapies to restore metabolic health in chronic
disease patients (mainly those with Type 2 diabetes).
$45
Q1
Sequoia Capital, Xianghe Capital, Qiming
Weichuang Venture Capital, Genesis Capital
Advisors, Advantech Capital
Infervision
Develops an artificial intelligence system for analyzing
the CT scans and diagnosis of thoracic pulmonary
disease.
$47.4
Q1
Kinship Trust Company, New Enterprise
Associates, Revolution Growth, T. Rowe Price
Tempus Labs
Developer of analytics platform that offers genomic
sequencing services and analyzes molecular and
therapeutic data to empower physicians and
researchers to make real-time, data-driven decisions.
$80
Q1
New Enterprise Associates
Care Zone Inc.
Provider of an online platform that allows patients to
keep track of appointments, get reminders for
prescription refills, and share access with family
members and caregivers.
$50
Q1
Arboretum Ventures, HealthQuest Capital
Jentryx (dba
BioIQ)
Developer of a health measurement platform created
to simplify at-home health testing.
$26.5
Q1
Verily Life Sciences, CapitalG, Eight Partners,
Fidelity Investments, The Founders Fund,
General Catalyst Partners, Khosla Ventures,
Thrive Capital
Oscar Insurance
Corporation
Provides health insurance services, a patient
communication platform, and a patient portal to
manage their health
$165
Q1
Andreessen Horowitz, McKesson, Madrona
Venture Group, Carrick Capital Partners, Cross
Creek Advisors
Accolade
On-demand healthcare concierge for employers,
health plans, and health systems.
$50
Q2
Tencent Holdings, Sequoia Capital, Qiming
Venture Partners
Miaoshou
Doctor
Provider of an online platform intended to offer
medicines, health, slimming, and skin care products.
$79
Q2
New Enterprise Associates, ITOCHU Technology
Ventures, Georgian Partners, Flare Capital
Partners, Everyday Health, Emergence Capital
Partners, Bessemer Venture Partners, Australia
Venture Fund, Ziff Davis Publishing Holdings
WellTok
Designs and develops a technology that drives
engagement through a combination of social,
gaming, and personalization technologies in the
healthcare industry.
$75
Q2
Undisclosed
DXY.cn
Provider of an online healthcare community portal
designed to help physicians to connect with other
doctors.
$100
Q2
Portag3 Ventures, Partech Ventures, CNP
Assurances, Xavier Niel, Index Ventures
Alan
Provider of an online health insurance platform.
$28.3
Q2
Flare Capital Partners, Lakestar Advisors, New
Enterprise Associates, Oxeon Partners, Amgen
Ventures
Aetion
Developer of platform that uses the everyday clinical
and financial interactions of the health care system to
unlock essential evidence about the effectiveness and
value of medical treatments
$36.4
Q2
Merck & Co., Microsoft, Sapphire Ventures,
Zaffre Investments, 7wire Ventures, Investment
AB Kinnevik, General Catalyst Partners, DFJ,
Kleiner Perkins Caufield & Byers
Livongo Health
Provider of platform that delivers personalized health
management for diabetes patients through real-time
information, feedback and support at the point of
impact, enabling employers, patients and payers to
improve the quality of health at a lower cost.
$105
Q2
Draper Fisher Jurvetson, Section 32, Mayo
Clinic, Canaan Partners, Casdin Capital,
LifeForce Capital
Vineti
Technology
A pioneering cell and gene therapy software and
analytics company.
$33.5
Q2
Woodford Investment Management
BenevolentAI
Provider of artificial intelligence technology intended
to transform the process of pharamaceutical research
and development.
$115
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
54
Quarter
Investor
Target
Target Description
Raise
($mm)
Q2
Health Velocity Capital, Blue Cross and Blue
Shield Association, Sandbox Industries, Noro-
Moseley Partners
Contessa
Health
Provider of home recovery care systems and plans
intended to bring hospital care to the patient's home.
$12
Q2
Elephant
RealSelf
Online marketplace for people to learn and share
experiences about elective cosmetic procedures.
$40
Q2
Blue Ivy Ventures, Centene Corp., HLM Venture
Partners, Optum Ventures
RubiconMD
Provider of a web-based eConsult platform designed
to connect primary care doctors with specialists.
$13.8
Q2
Yadong Xingchen
Yishengzhan
Operator of an online medical education application.
The company's application helps doctors in China to
exchange medical information and learning.
$23.9
Q2
Shasta Ventures, Tenaya Capital, Venrock,
Princeville Global, Goldman Sachs
Doctor on
Demand
Operates an online platform that enables patients to
connect with doctors from computers, smart phones,
and tablets.
$74
Q2
Angel Investors, Roivant Sciences
Datavant
Helps healthcare organizations safely link their data to
improve medical research and patient care.
$40.5
Q2
American Medical Association
Health2047
Develops and provides data liquidity, chronic care,
productivity, and payments solutions for physicians,
healthcare providers, pharmaceutical providers, and
other healthcare enterprises.
$27.2
Q2
Venrock, Angel Investors, Social Capital, First
Round Capital
Suki (fka Robin
AI)
Developer of an artificial intelligence-powered voice-
enabled digital assistant for doctors that integrates
with existing electronic health records and lifts the
burden of medical documentation,.
$15
Q2
Undisclosed
Century Kaige
(dba Kaige
Health)
Provider of an online platform that focuses on helping
medical institutions through expert resources, project
resources, and government service resources.
$31.4
Q2
The Riverside Company
Soothe
Offers on-demand massage services.
$31
Q2
Crown Ventures, Providence Ventures, Venrock,
Casdin Capital, Glynn Capital Management,
Tenaya Capital, Greylock Partners
Lyra Health
Provides analytics and screening tools to identify
people who can benefit from behavioral health care.
$45
Q2
Undisclosed
Innovaccer
Developer of a healthcare data platform intended to
simplify complex data, streamline the information,
and help organizations make powerful decisions.
$25
Q2
Blueprint Health, Health Enterprise Partners
Intraprise
Health
Provider of a comprehensive suite of information
security and compliance services and technologies, as
well as a multi-channel healthcare community
engagement platform.
na
Q2
Pelion Venture Partners, Trilogy Equity
Partners, Enfield Ventures, Eclipse Ventures,
Broadway Angels
Owlet Baby
Care
Maker of a baby monitor that includes heart rate and
oxygen level measurements.
$24
Q2
M Ventures, Temasek Holdings, Jazz Venture
Partners, Canepa Advanced Healthcare Fund,
Brooklands Capital Strategies, Amgen Ventures
Akili Interactive
Labs
Develops platform technology that test and enhance
the cognitive abilities through a video game.
$55
Q2
AIA Company, NWS Holdings
Guahao.com
(WeDoctor)
Operates an online platform for hospital appointment
registration.
$500
Q2
The San Francisco 49ers, WndrCo, Angel
Investors, Lerer Hippeau Ventures, Blue Pool
Capital, Greycroft Partners, Canvas Venture
Fund, IVP, Female Founders Fund, Advancit
Capital
Thrive Global
Provider of a consumer wellness platform intended to
end the stress and burnout epidemic by offering
companies and individuals sustainable, science-based
services to enhance well-being, performance, purpose
and create a healthier relationship with technology.
$43
Q2
JMI Equity
CipherHealth
Provides software that develops value-based
reimbursement models for effective communication
with patients.
$37.6
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
55
Quarter
Investor
Target
Target Description
Raise
($mm)
Q2
Arboretum Ventures, Baird Capital, Deerfield
Management Company, Merck & Co., Pfizer
Venture Investments, Renaissance Venture
Capital Fund
Strata
Oncology
Provider of precision oncology testing and patient
matching services for drug testing trials intended to
expand patient access to tumor sequencing and
precision medicine trials.
$26
Q2
Norwest Venture Partners, Mayfield Fund, New
York Presbyterian Fund, Bessemer Venture
Partners
Qventus
Developer pf operations management system that
helps doctors and administrators of hospitals to
addresses operational challenges across the hospital.
$30
Q2
Kleiner Perkins Caufield & Byers
Beam
Technologies
(Beam Dental)
Develops a toothbrush that is paired with a
smartphone application which monitors daily brushing
and sends reports to user's dentist.
$22.5
Q2
Polaris Partners, .406 Ventures, Flare Capital
Partners, F-Prime Capital Partners, GE Ventures,
Humana, Khosla Ventures, Temasek Holdings
Iora Health
Operates a healthcare system that offers a team-based
approach with a doctor or nurse practitioner, nurse,
behavioral health specialist and health coach for each
patient.
$99.7
Q2
Bascom Ventures, Trans-Pacific Technology
Fund, RLJ Equity Partners, Angel Investors, IRA
Capital, Inflection Capital, Fidelity Investments
Get Heal, Inc.
(dba Heal)
Provider of on-demand doctor house calls.
$20
Q2
Thrive Capital, Andreessen Horowitz, Naspers
Ventures
Honor
Provider of non-clinical home care for older adults.
$50
Q2
Polaris Partners, General Catalyst Partners,
7wire Ventures
OM1
Provider of platform system that gathers, synthesizes,
enriches, and leverages clinical data to provide
measurements and AI-driven insights and predictions
that can improve clinical, financial and operational
management.
$21
Q2
L Catterton, BrandProject
Vitamin Packs
Provider of a next generation subscription-based
platform intended to supply vitamin supplements.
na
Q2
btov Partners, Global Sources, Polytech
Ecosystem Ventures, Zurcher Kantonalbank,
SVC, Swisscom, BlueOcean Ventures
AvaWomen
Developer of mobile-enabled fertility tracking app.
$30
Q2
Social Capital, McKesson, Safeguard Scientifics,
Hikma Ventures, 3M Ventures, SR One, Aptar
Pharma
Propeller
Health
Digital solution provider that offers sensors, mobile
apps, analytics and services to support respiratory
health management.
$20
Q2
The Kraft Group, Andreessen Horowitz, Polaris
Partners
CAMP4
Therapeutics
The company's gene circuitry platform solves the
circuitry code, unique to each human gene, facilitating
the rapid discovery of new treatments.
$30
Q2
Aurum Ventures, Intermountain Healthcare,
Dolby Family Ventures, aMoon Partners,
OurCrowd, NVIDIA GPU Ventures, Khosla
Ventures, Johnson & Johnson Innovation
Zebra Medical
Vision
Provides imaging research solutions for clinicians,
advanced learning and computer vision diagnostic
algorithms for developers.
$30
Q2
FirstMark Capital, F-Prime Capital Partners,
Goldman Sachs, Volition Capital
TraceLink
Provides pharmaceutical serialization, drug track and
trace compliance, and supply network performance
solutions.
$60
Q2
Norgine Ventures, Surgical Intelligence
caresyntax
Develops a surgical analytics, technology, and services
platform for hospitals and ambulatory surgery centers
to identify and manage risks.
$31.9
Q2
Index Ventures, Creandum, Accel Partners,
Project A Ventures
KRY
Provider of an application designed to provide video
consultation to doctors.
$66
Q2
Angel Investors
Medici
Develops an application that enables users to
communicate with a physician, a veterinarian, or
therapist by phone.
$22
Q2 McKesson, Sealed Air, The Emerson Group, CPG
Company RB
Pharmapacks E-commerce company for health and beauty products.
$32.5
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
56
Quarter
Investor
Target
Target Description
Raise
($mm)
Q2
SPDB International, Gaocheng Capital, ICBC
International
Shanghai Yitu
Network
Technology
Engaged in the research of computer vision, image and
video intelligent understanding, distributed system,
and big data application. It plans to invest in the
research and development of how to apply artificial
intelligence in healthcare and other sectors.
$200
Q2
Benchmark Capital, F-Prime Capital Partners,
Fidelity Investments, Thrive Capital
Benchling
Provider of an electronic lab collaboration platform
intended to give scientists and management the
software to accelerate the pace of R&D.
$14.5
Q2
Insight Venture Partners, Millennium
Technology Value Partners, 14W
Aaptiv
Provides an on-demand audio fitness Website and a
mobile application for audio-based fitness classes with
the guidance of a trainer.
$22
Q2
Insight Venture Partners, Sound Ventures
Calm.com
Provider of a relaxation therapy application designed
to reduce anxiety, sleep better and feel happier.
$27
Q2
Hangzhou Lianchuan Investment Management,
SenseTime, Wanxiang Healthcare Investments
Helian Health
The company's services, health applications, and
corporate employee health management platform uses
artificial intelligence to accurately interpret personal
health data and customizes personalized health
management programs, differentiated exercise
prescriptions and balanced meal plans.
$75
Q2
Data Collective, Dolby Family Ventures, The
Founders Fund, Future Shape, Lux Capital
Management
Vium
Provider of a living informatics platform intended to
help in pre-clinical drug research.
$24
Q2
The Founders Fund, Thrive Capital, Lakestar
Advisors, Sound Ventures, Angel Investors,
Investment AB Kinnevik
Cedar, Inc.
Provider of a patient payment platform intended to
offer a smarter way for hospitals, health systems and
medical groups to manage the patient payment
ecosystem.
$36
Q2
Tritium Partners
DCS Global
A leading provider of revenue cycle management
software.
na
Q2
Bpifrance, Johnson & Johnson, MAIF, Angel
Investors
Dreem
Developer of a sleep tracking technology headband
designed to enhance sleep.
$36.7
Q2
Shareholder Value Management, Undisclosed Nuvo Group
Developer of a pregnancy management platform
designed to optimize pregnancy healthcare. The
company's wearable devices offer remote monitoring,
enabling patients to better connect, monitor, and bond
with their child during pregnancy.
$30
Q2
UnitedHealth Group, Lemhi Ventures
Bind Benefits
Provider of an online platform intended to offer health
insurance related information. The company's online
platform focuses on preventive care, primary care,
specialty care and chronic care related insurance
services and provides information regarding insurance
coverage, pricing and treatment options.
$70
Q2
Undisclosed
American Well
Corporation
Operates as a telehealth services company. Operates
an online marketplace that offers software, services,
and access to clinical services.
$290.6
Q3
Salesforce.com
Virsys12
A technology consulting firm specializing in cloud
computing software-as-a-service technologies.
Q3
Undisclosed, China Investment Corporation
LinkDoc
Technology
Developer of a Saas based oncology big data platform
designed to provide leading clinical structured data to
China's oncology and to help hospitals solve research
and clinical problems.
$151
Q3
Cerner
Essence Group
Holdings
Corp.
(Lumeris)
Provider of an online platform designed to offer
population health-management services. Lumeris is a
subsidiary of Essence Group Holdings.
$266
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
57
Quarter
Investor
Target
Target Description
Raise
($mm)
Q3
Morningside Ventures, GGV Capital, Tencent
Holdings, Goldman Sachs, Bertelsmann Asia
Investments
Keep app
Developer of an fitness application designed to offer
fitness guidelines to sports loving people.
$127
Q3
L Catterton, Temasek Holdings
ClassPass
Offers an online subscription service that provides
access to fitness classes.
$85
Q3
Blue Cross and Blue Shield Association,
Sandbox Industries, Accel-KKR
Patientco
A cloud-based platform that allows patients
understand and pay their healthcare bills.
$28
Q3
GlaxoSmithKline
23andMe
Offers a personal genome service that enables users to
search and explore genes contributing to their personal
characteristics.
$300
Q3
Kalaari Capital, IDG Ventures India, Accel
Management, Oaktree Capital Management,
Chiratae Ventures
CureFit
Developer of a fitness based online platform created to
address preventative healthcare techniques.
$120
Q3
Sequoia Capital
Medlinker
Develops a mobile social application for doctors.
$154.87
Q3
Cigna Corp., Health Care Service Corp., Industry
Ventures, Novo Holdings, Health Velocity
Capital
MDLive
Provider of Virtual Medical Office software platform
that makes it possible for patients, medical
professionals and plan administrators to collaborate
seamlessly and securely via voice, video, email and
mobile devices.
$50
Q3
True Ventures, Kleiner Perkins Caufield & Byers,
Technology Crossover Ventures, Fidelity
Investments, NBCUniversal Media, Balyasny
Asset Management, Wellington Management
Company, Felix Capital Partners, Winslow
Capital Management, Tiger Global
Management
Peloton
Interactive
Provides at-home fitness solution for live and on-
demand indoor cycling classes.
$550
Q3
Silver Lake
GoodRx
Operates as a prescription drug price comparison tool
that mines data from local and mail-order pharmacies.
na
Q3
CapitalG
Oscar
Provides health insurance services, a patient
communication platform, and a patient portal to
manage their health.
$375
Q3
The Carlyle Group
One Medical
Operator of primary-care physician offices that allow
patients to book same-day visits online.
$250
Q3
New Enterprise Associates
Paladina
Health
Provider of employer-sponsored healthcare platform
intended to provide convenient and unhurried patient-
centered care services.
$165
Q3
New Enterprise Associates, Revolution
Tempus
Develops a software platform that uses data to provide
doctors information about treatment options for
individual patients, showing how other patients with
similar genetic profiles have responded to particular
therapies.
$110
Q3
Oak HC/FT Partners
Cricket Health
Provider of a healthcare platform intended to offer
technology-enabled products and services to
modernize and transform how kidney care is delivered
for people living with chronic kidney disease (CKD) and
end stage renal disease.
$24
Q3
Horizons Ventures
Driver (Drug
Discovery)
Provider of an online treatment access platform
created to connect people for cancer treatments all
over the world.
$80
Q3
FirstMark Capital, General Catalyst Partners,
BoxGroup, Signalfire
Roman Health
Medical (dba
Roman)
A cloud pharmacy for erectile dysfunction, handling
everything from online diagnosis to prescription
delivery.
$88
11
Copyright 2019 Healthcare Growth Partners
Appendix C
Private Equity Highlights (non-buyout)
58
Quarter
Investor
Target
Target Description
Raise
($mm)
Q3
Draper Fisher Jurvetson, Oak HC/FT Partners
OODA Health
Developer of a payer administration platform
designed to transform the way patients pay for
healthcare. The company's platform uses AI and
real-time payments via retail-like experience and
streamlines the experience for all.
$40.5
Q3
Oak HC/FT Partners, Sequoia Capital
Maven Clinic
Provides a telemedicine platform for women.
$27
Q3
Fosun Pharma, Bill & Melinda Gates
Foundation, Fidelity Investments
Butterfly Health
Network
Developer of a smartphone-connected, full-body
ultrasound device named Butterfly iQ.
$250
Q4
Silversmith Capital Partners
MediQuant
Provider of a clinical platform intended to offer
legacy systems and medical necessity compliance
related service.
na
Q4
Primus Capital
Hayes
Management
Consulting
Provider of healthcare consulting services. The
company provides consulting services to healthcare
organizations including strategic, revenue cycle and
clinical IT consulting in United States.
na
Q4
Undisclosed
Aledade
Operator of an Accountable Care Organization
(ACO) designed to offer policies and discussions
regarding Medicare Shared Savings Plan (MSSP).
$46.15
Q4
Andreessen Horowitz
Devoted Health
Provides healthcare solutions to provide Medicare
advantage plans and navigates health care systems
with personal guides in the United States.
$300
Q4
Link-age Ventures, Clearlake Capital Group,
Health Velocity Capital
OnShift
Provides web-based staff scheduling and shift
management software for healthcare companies.
na
Q4
Goldman Sachs
98point6
Provider of a healthcare platform intended to
receive private, chat-based consultation from
board-certified physicians.
$50
Q4
New Enterprise Associates, Redpoint Ventures,
Greycroft Partners, Greenspring Associates,
Flare Capital Partners, Cross Creek Advisors,
Bessemer Venture Partners, Meritech Capital,
Declaration Partners, Town Hall Ventures
Bright Health
The company's health insurance service platform
partners with health systems and care partners to
provide health plans and a connected healthcare
experience to support relationships between
consumers and care providers.
$200
Q4
AXA Venture Partners, Alliance Enteprendre,
Partech Partners, Compagnie dAnjou
Happytal
Provider of social initiative revolutionizing services
intended to improve the experience of patients in
healthcare facilities.
$23.3
Q4
Olive Tree Capital, Jackson Square Ventures,
Zola Global, Greenoaks Capital Partners
Alto Pharmacy
The company's platform offers medication
management and scheduled delivery through web
portal or mobile application, enabling patients to
have an easy and hassle free pharmacy experience.
$50
Q4
Catalyst Investors, Lead Edge, Bessemer
Venture Partners, Pelion Venture Partners,
CrossLink Capital
Weave
Communications
Provider of CRM and ERP-integrated
communications services for dentists and other
small businesses
$37.5
Q4
New Mountain Capital
Remedy Partners
Delivers software and services that enable payers,
employers and at-risk providers to organize and
finance health care delivery around a patient's
episode of care.
na
Q4
DCM, Tiger Global Management, H Capital
Yaoshibang
Developer of a mobile app to purchase medicines
from pharmacy directly.
$133
11
Copyright 2019 Healthcare Growth Partners