January 2020 M&A activity highlighted continued momentum on several compelling themes:
- Empowering and Informing the Consumer. Employees and health plan members are continuing to seek out solutions to simplify engagement and navigation with their benefits and support their overall well-being and health management. The market is quickly adopting approaches that increase access and utilization of primary care, support condition management for high cost populations, and provide a deeper level of clinical and benefits advocacy navigation through high-touch and digital solutions.
- Increased Focus Across the Radiology Spectrum. The healthcare imaging industry is going through an evolution, which is driving investor interest within radiology technology and services. Scan volumes are increasing, but there are limited reading resources and technology, which is driving technological innovation and shifts towards enterprise solutions. Similarly, the top 100 radiology services providers account for less than 20% of market share, presenting a situation that is ripe for consolidation. As technology providers continue to innovate and evolve, and service providers seek to gain additional market share, we expect to see continued investor interest and activity in this space.
- Analytics as a Tool to Drive Down Costs. In the perpetual effort to drive down healthcare costs and improve outcomes, data analytics remain an under-utilized tool. A recent Black Book survey found that 84% of C-suite officers at provider organizations reported that they only use data analytics to a “limited or minimal” extent, even though they have access to the data. While providers are not utilizing analytics to the extent they can, global HCIT organizations are using and continue to invest heavily in their analytics capabilities, as evidenced by January analytics deal announcements by Definitive Healthcare, Infor, and Press Ganey. As integrated data becomes more accessible to all types of organizations, we expect to see interest in data analytics organizations increase as analytics become a valuable input into strategic decision-making processes.
Several transactions announced in January align with these themes:
- Virgin Pulse acquired Yaro, a mobile-first digital navigation and health literacy platform, and Blue Mesa Health, best known for its diabetes prevention program. These acquisitions highlight Virgin Pulse’s strategy of helping consumers cost-effectively navigate the healthcare ecosystem and expand the company’s capabilities in supporting high cost/high risk populations through specialized solutions.
- Teladoc Health acquired InTouch Health, a provider of enterprise telehealth solutions for hospitals and health systems. The acquisition positions Teladoc as the partner of choice for health systems seeking to cover the full range of acuity across all care sites. The combined company will look to capitalize on favorable reimbursement tailwinds while improving consumer engagement.
- Marathon Health, a General Atlantic portfolio company, and OurHealth announced a strategic combination. The combined company will continue to execute on its onsite and near-site primary care strategy for employers. Accelerated investment in technology-enabled clinical and population health capabilities will drive cost out of the system for consumers and employers.
- Radiology Partners, the largest radiology practice in the U.S. and portfolio company of Starr Investment Holdings, has announced a new practice partnership with Radiology Associates of Appleton, a Wisconsin-based radiology provider. The partnership further expands Radiology Partners’ presence in Wisconsin after partnering with Wisconsin-based Advanced Diagnostic Imaging in December. The financial terms of the deal were not disclosed.
- Covera Health, a provider of radiology clinical analytics solutions intended to reduce medical misdiagnoses, has raised $23.5M in Series B funding. Insight Partners led the round with participation from existing investor Prism Ventures. The funds will be used to accelerate Covera’s data science R&D efforts and further expand its national Radiology Centers of Excellence program, which serves health plans, self-insured employers, and strategic partners.
- Hg Capital, a specialist private equity investor focused on software and services businesses, has finalized an agreement for a majority investment in Intelerad Medical Systems, a leading global medical imaging software provider that specializes in diagnostic viewing, reporting, and collaboration solutions for radiologists. TripleTree served as buy-side advisor to Hg Capital as part of this transaction.
- Press Ganey, a provider of strategic advisory services for healthcare organizations, has acquired Strategic Management Decisions, a provider of healthcare HR consulting and predictive analytics solutions. The acquisition complements and extends Press Ganey’s Workforce and Engagement Solutions with analytic insights that pinpoint and prioritize opportunities to achieve cultural alignment, drive engagement, and build caregiver resilience. The financial terms of the deal were not disclosed.
- Definitive Healthcare, the leading provider of data, insights, and analytics on the healthcare provider market, announced the acquisition of PatientFinder, a software analytics firm that helps life science companies and healthcare providers find patient clusters who would most benefit from their products and services. Definitive Healthcare also acquired HIMSS Analytics’ data services division in January 2019.
TripleTree and TT Capital Partners continuously monitor the market to identify the forces and themes impacting the healthcare industry. Thanks for reading and let us know what you think!