FINANCIAL

Noteworthy M&A Transactions - May 2019

JUN 18
May 2019 M&A activity highlighted continued momentum on several compelling themes: 
  
  1. Revenue Cycle Management (RCM) and Payment Solutions. Regulatory and industry changes are driving demand for services to help providers overcome financial and operational challenges, which healthcare technology companies are looking to address. Shifting payment models, such as the Patient-Driven Groupings Model (PDGM) and other regulatory standards are causing providers to enhance operational efficiencies in order to maintain a competitive advantage. These factors are increasing the demand for RCM service providers that can better manage financial and administrative complexities across care settings.
  2. Remote Patient Monitoring. The need for remote patient monitoring is being propelled by the market’s search for solutions to improve outcomes, reduce healthcare spend, and improve patient quality of life in the home. With the growing number of seniors and chronically ill patients, along with an increasing emphasis on aging at home, comes the need for scalable and cost-effective solutions to manage these populations. The shift toward continuous care for patients with chronic conditions and the elderly will continue to be driven by the combination of increased availability of consumer healthcare devices and an increased willingness to capture and share personal data. This is a trend TripleTree has been watching closely, with further research on the trend accessible in our August 2018 blog titled “Better Healthcare Through Patient Data”.
  3. Home Health / Hospice. As we have previously noted, the home health and hospice market continues to flourish, leading to ample M&A activity from both strategic partners and financial sponsors. Favorable tailwinds have been a key factor in the momentum of hospice, including an aging baby boomer generation and, according to Hospice News, utilization of hospice centers by over 50% of Medicare beneficiaries. With the combination of a fragmented hospice market and regulatory developments, we expect high M&A activity to persist as industry consolidation continues.
 
Several transactions announced in May align with these themes:
 
  • Healthcare IT provider Netsmart announced it has acquired McBee. McBee’s industry leading healthcare technology-enabled revenue cycle management and professional services solutions, serving the acute and post-acute care settings, will help build upon and expand Netsmart’s suite of consulting and managed service offerings. The acquisition will add industry expertise and resources specifically geared toward strategic consulting, change management, revenue cycle management, advisory and educational services to Netsmart’s current capabilities. TripleTree acted as the exclusive strategic and financial advisor to McBee.  
 
  • Ensemble Health Partners announced that their current owner, Bon Secours Mercy Health, will sell a 51% stake to Golden Gate Capital, a leading private equity investment firm. Ensemble provides revenue cycle outsourcing to hospitals throughout the United States, with the intention of improving healthcare operations. Over the past few years, Ensemble was able to experience exponential growth. The company will continue their current strategy, using the Golden Gate investment to enhance their technology and services provided to customers.
 
  • JP Morgan announced its plan to acquire InstaMed, a leading healthcare technology company specializing in healthcare payments, for $500 million. The acquisition will expand the bank’s suite of payment services, utilizing InstaMed’s centralized platform to alleviate challenges in healthcare payments by eliminating paper, improving the consumer financial experience, and reducing the cost of collecting payments. This acquisition represents JP Morgan’s largest since the 2008-09 recession.
 
  • Best Buy has acquired Critical Signal Technologies (CST), a leading provider of remote patient monitoring and care services, offering a comprehensive suite of solutions based on personal emergency response systems (PERS) and real-time healthcare monitoring. Through a 24x7, HIPAA-compliant monitoring center, the company monitors individuals living independently at home on behalf of the payers, providers, and living facilities that serve them. CST’s differentiated approach, supported by a social work-based model that addresses the social determinants of health, has resulted in a cost effective and scalable solution to deliver high quality of care. TripleTree acted as the exclusive financial advisor to Critical Signal Technologies.
 
  • Apple has acquired Tueo Health, a patient monitoring solution for children with asthma. Tueo is developing a mobile app that leverages breathing sensors to manage asthma symptoms in children. The app is being designed to monitor a child’s breathing during sleep and alert parents and caregivers should the child’s breathing change. This acquisition aligns with Apple’s recent revamp of its health features on popular products, including the Apple Watch and iPhone, as they continually seek to be a leader in the consumer healthcare market. 
 
  • AccentCare has agreed to be acquired by the private equity firm, Advent International. AccentCare is a Dallas-based provider of post-acute services with a presence in 16 states. The company helps their customers with a wide range of home health services, including rehabilitative therapy and hospice. After being acquired the company will continue to execute on their core strategy of strengthening their current position in the market. Advent also sees potential in engaging in more partnerships with physicians and health systems, allowing AccentCare to serve more patients.
 
  • Arosa+LivHome announced the acquisition of Forever Young Home Care. Backed by Bain Capital Double Impact, Arosa+LiveHome was created from the combination between two regional health care companies: Arosa and LiveHome. Forever Young Home Care is a Greensboro, NC based company that provides personalized home care service throughout NC and GA. The acquisition was done in effort to help scale Arosa+LivHome’s home care business nationwide.
  
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!
  

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