Noteworthy M&A Transactions – January 2022

FEB 25
January 2022 M&A activity consisted of several compelling themes:
  1. Favorable Provider Sentiment Towards Telehealth Services: Telehealth services became a staple and moved to the forefront during the COVID-19 pandemic; however, this left many people wondering whether the demand for telehealth services was transitory in nature. A recent study by the COVID-19 HealthCare Coalition (managed by the Mayo Clinic) on Telehealth suggests that the demand for telehealth is here to stay. The study found that physicians viewed telehealth extremely favorably as 85% indicated that telehealth increased timeliness of care, 75% said telehealth allowed them to deliver high-quality care, and more than 70% were motivated to increase telehealth use. This favorable sentiment and continued demand for telehealth will extend the reach of providers and help mitigate the provider shortage in many parts of the country. In fact, a recent blog from McKinsey & Company highlighted this reality, noting that 56% of counties are without a psychiatrist, 64% have a shortage of mental health providers, and 70% lack a child psychiatrist. Extending provider virtual reach will help address the behavioral health crisis the country is facing. Private Equity firms and strategic buyers have taken notice of this growing interest in telehealth services and have deployed significant capital into the sector.
  2. Significant Deal Activity Continuing in the Home Care Space: M&A activity in home healthcare was active during the first month of the year, with transactions across several sectors, including residential care delivery, hospice, post-acute, behavioral health, and non-clinical care. Activity in the hospice sector continues to be a major driver of overall activity, as larger players continue to rapidly acquire strategic tuck-ins in a highly fragmented industry. Activity in the post-acute sector also had a fast start to the year. With the continued movement towards value-based care, companies administering care in lower-cost home-based settings piqued interest from both financial sponsor and strategics. The aging U.S. population continues to be a tailwind for home healthcare, with CMS estimating that home health expenditures (including hospice) will reach an estimated $528B per year by 2028. We anticipate continued M&A activity across home healthcare sectors throughout 2022 and beyond.
Several transactions in January aligned with these themes:
  • Learn to Live, a Minneapolis, Minnesota-based tele-cognitive behavioral therapy provider, closed a substantial financing round led by private equity firm Concord Health Partners. This latest round of investment will enable Learn to Live to launch new programs and to scale beyond its current member base of 33M people.
  • Dura Software, a company offering hyper niche software products, announced it acquired SecureVideo, a cloud-based software company developing a secure SaaS telehealth platform for the healthcare industry. SecureVideo is the ninth acquisition for Dura Software and furthers the Dura mission of acquiring niche software companies that serve critical business needs.
  • Mantra Health, a behavioral telehealth startup focused on young adults, raised $22M in Series A funding led by VMG Partners. The round includes new investors New Market Venture Partners, Elements Health Ventures, 14W, and Alumni Ventures. Returning investors include Canaan Partners, Global Founders Capital, Baleon Capital, Western Tech Investments, and City Light Capital. This latest investment brings the Company's total amount of funding to nearly $28M.
  • Comprehensive Healthcare Systems Inc. signed a binding letter of intent to acquire all assets related to telehealth platform MISOHE from True Base Private Ltd.
  • LifeMD, a direct-to-patient telehealth company, announced it acquired Cleared, an allergy focused telehealth platform.
  • A Place for Mom (APFM), North America’s largest network connecting families to senior living service providers, announced it raised $175M in growth equity funding. The funding round was led by Insight Partners with participation from existing investors General Atlantic and Silver Lake. APFM’s revenue grew by ~30% in 2021 and its fastest growing business segment was its home care business.
  • Care Advantage, one of the largest privately owned home health companies in the Mid-Atlantic, announced its acquisition of Silver Lining Healthcare, a Delaware-based home healthcare company. This purchase marks Care Advantage’s 15th acquisition since 2018 and its 3rd since Searchlight Capital Partners acquired a majority stake in its business in June of 2021. This acquisition serves to strengthen Care Advantage’s presence in the state of Delaware and will likely serve as a springboard to more transactions in 2022.
  • Choice Health at Home, a Texas-based home health, hospice, and rehabilitation service provider, announced the acquisition of Kindful Hospice and Amed Home. Kindful Hospice operates six locations in Kansas and Oklahoma, while Amed has eight offices solely in the state of Texas. These purchases reflect Choice’s continued strategy of building a presence in the Southwest/Midwest. Choice had previously been active in 2021, especially in Oklahoma, but the Kindful transaction marks Choice’s first venture into Oklahoma.
TripleTree continuously monitors 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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