FINANCIAL

Noteworthy M&A Transactions – September 2019

OCT 23
September 2019 M&A activity highlighted several compelling themes interrelated around specialty care settings.
 
  1. Specialty EHR. The specialty EHR M&A market continues to see increasing amounts of activity, driven by rapid consolidation through both strategic acquirers and financial sponsors. Specifically, within the month of September, we noticed a continued push by financial sponsors within behavioral health EHR. EHR solutions across the entire continuum of care (e.g., behavioral health, physical therapy, etc.) continue to see high demand from financial sponsors, as it becomes increasingly clear that the enterprise leaders’ solutions are ill equipped to meet the needs across various specialties. Furthermore, with the maturation of enterprise and ambulatory EHR markets, financial sponsors continue to push into the less mature segments of the market. EHR consolidation is not new – 10 years ago there were over 1,000 EHR vendors while today, there are approximately 400 vendors. As potential acquirers look to grow customer bases and further penetrate the specialty EHR markets, further consolidation will likely continue into 2020 and beyond.
  2. Autism and Behavioral Health. Access to autism treatment and behavioral healthcare is becoming increasingly important in today’s evolving healthcare environment. Autism Spectrum Disorder (ASD) has increased 180% since 2004, making it the fastest growing developmental disability and costing the U.S. upwards of $60B a year for children alone. According to recent research by the Center for Disease Control and Prevention, 1 in 59 children fall on the ASD spectrum. The most common treatment for ASD is Applied Behavior Analysis (ABA), which is increasingly being covered in standard health benefits packages. With the growing number of people being affected by this disability, an increasing population with health benefit coverage, and the massive societal costs attributable to ASD, consolidation in this highly fragmented market will continue.
  3. Physician Practice Management. Physician practice management acquisitions continue to proliferate as buyers, both strategic and financial, look to gain scale and create significant synergies. As physicians continue to face mounting pressure from rising costs and administrative burdens, a natural consolidation opportunity has occurred with buyers looking to combine small independent organizations with larger organizations that provide relief of administrative burdens. Simultaneously, by expanding geographic reach, buyers are enhancing relevance and strengthening relationships with both patients and payer networks. Recent practice management activity has been concentrated in a few specialties, particularly ophthalmology and dental, which are supported by strong financial fundamentals that have attracted financial sponsors. While dental has long been an attractive area for financial sponsors, ophthalmology is a relatively more recent trend; however, both look poised for continued deal activity, particularly within financial sponsors.
 
Several transactions announced in September align with these themes:
 
  • Warburg Pincus acquired Great Hill Partners’ Qualifacts in what represents the buyout firm’s fourth and latest bet in the universe of specialty electronic health records. On the heels of Warburg’s August investment in WebPT, the New York firm is buying Qualifacts, whose EHR software is tailored to providers of behavioral health and human services. TripleTree acted as the exclusive financial advisor to Warburg Pincus.
 
  • Credible Behavioral Health, a provider of electronic health records and practice management Software-as-a-Service solutions to the U.S. behavioral healthcare market, closed a minority recapitalization from Martis Capital. Credible offers a single, integrated platform and a differentiated feature set, including fully integrated clinical, scheduling, primary care, ePrescribing, inpatient, mobile, and billing modules. Financial terms of the transaction were not disclosed.
 
  • Golden Gate Capital announced the acquisition of Invo Holdings, a leading provider of autism and childhood behavioral health services. The Jordan Company, which previously invested in Invo in 2017, will retain a minority ownership stake. Invo provides an array of multi-disciplinary, research-based therapy services to infants, toddlers and school-aged children with various developmental delays, including autism, in homes, at schools and in community-based centers. Invo delivers best-in-class clinical quality services by its highly credentialed and trained workforce of more than 2,500 clinicians in 27 states. Financial terms of the transaction were not disclosed.
 
  • Pharos Capital, through its Family Treatment Network platform, completed an investment in Alpine Academy and Interventions Unlimited, which together provide Applied Behavior Analysis-based educational services and ABA therapy to children. Alpine Academy is a private day school serving children who are diagnosed with ASD. Interventions Unlimited provides home and clinic-based programs to children and adolescents diagnosed with autism spectrum disorder, behavioral or emotional problems, learning disabilities, and other developmental disabilities. Alpine Academy and Interventions Unlimited represent Family Treatment Network's fifth acquisition. Terms of the transaction were not disclosed
 
  • Alpine Investors announced that its portfolio company, Light Wave Dental Management, a leading dental management company, has partnered with CarolinasDentist, a high-growth dental group with seven locations based in Fayetteville, N.C. With the addition of CarolinasDentist, Light Wave has grown from eight to 30 affiliate locations in Virginia and North Carolina over the past 24 months. Terms of the private transaction were not disclosed.
 
  • Vision Innovation Partners announced its acquisition of Washington Eye Specialists, a leading ophthalmology practice located in Washington, D.C. The acquisition further expands Vision Innovation Partners' growing network of ophthalmology practices in the Mid-Atlantic region. Vision Innovation Partners is backed by Centre Partners. This is Vision’s ninth acquisition in just two years. Financial terms of the transaction were not disclosed.
  
TripleTree and TT Capital Partners continuously monitor the market to identify the forces and themes impacting the healthcare industry. Thanks for reading and as always, let us know what you think!
   
Related Blogs:
 
Avatar
Chris Roebber
Like most websites we use cookies here, but we don't share your information. By continuing your visit, you accept the use of cookies. Find out more