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      MERGERS AND ACQUISITIONS UPDATES FROM BERKERY NOYES

    Entries in Jeffrey Smith (8)

    Thursday
    Mar092017

    SPONSORED TRANSACTIONS DOMINATING VALUE IN THE HEALTHCARE INFORMATION AND TECHNOLOGY INDUSTRY

    Berkery Noyes’ Healthcare report for full year 2016 revealed that total transaction volume remained constant on a year-to-year basis. Aggregate value gained 75 percent, from $17.47 billion to $30.51 billion. Excluding IMS Health’s merger with Quintiles Transnational Holdings for $8.75 billion, value rose 25 percent. As for strategic acquirers, the number of deals improved three percent, from 351 to 363. Private equity backed volume fell 12 percent, from 101 to 89.

    Regarding private equity, three of the top five and six of the top ten highest value acquisitions in 2016 were completed by financial sponsors. The industry’s largest private equity backed deal during the year was Blackstone Group’s announced acquisition of TeamHealth, a provider of outsourced physician staffing solutions for hospitals in the U.S., for $6.02 billion in the Healthcare Business Services segment.

    Other notable sponsored deals in the Healthcare Business Services segment included EQT’s acquisition of Press Ganey Associates, a healthcare performance improvement company that offers patient experience measurement, performance analytics and strategic advisory solutions, for $2.4 billion; and Bain Capital’s announced acquisition of Epic Health Services, a provider of pediatric skilled nursing, therapy, developmental services, and home adult home healthcare services.

    Deal volume in the Healthcare IT segment decreased five percent on an annual basis. This followed a 20 percent rise in 2015. Strategic acquirers were dominant and comprised 86 percent of Healthcare IT volume over the past year. The segment was also responsible for five of the overall industry’s top ten highest value deals in 2016.

    "One of the most active spaces in healthcare M&A is behavioral health," said Jon Krieger, Managing Director at Berkery Noyes. "It's a high growth, fragmented market driven by very favorable industry tailwinds."

    “We continue to see workflow tools that make practicing medicine, performing a clinical trial or smoothing the operations of healthcare entities as areas with lots of entrepreneurs developing unique solutions,” stated Tom O’Connor, Managing Director at Berkery Noyes. “In addition, there’s a high level of interest in solutions that help move hospitals and other healthcare organizations off client server, on premise solutions to SaaS and cloud opportunities. This entails lower upfront cost, less IT hassles and a better environment for updates.”

    Upon examination of additional markets covered in the report, the combined Pharma IT, Pharma Business Services, and Pharma Information segments saw a 76 percent increase, from 45 to 79 transactions. Deal flow in the Pharma IT nearly doubled, from 25 to 47 transactions. “The pharmaceutical market is experiencing strong demand in the areas of pharma technology, proprietary data, compliance tools, and drug safety information,” added Jeffrey Smith, Managing Director at Berkery Noyes.

    Monday
    Nov252013

    TRANSACTION VOLUME IN THE HEALTHCARE INDUSTRY REGAINS MOMENTUM

    Berkery Noyes has issued its Healthcare/Pharma Information and Technology report for third quarter 2013. The firm’s research showed that volume increased seven percent.

    The Healthcare IT segment underwent a 56 percent volume increase on a quarterly basis. It also accounted for nearly half of the industry’s aggregate M&A volume, as opposed to 31 percent in the prior quarter. The largest Healthcare IT transaction in third quarter 2013, as well as the overall industry’s highest value deal, was Vitera Healthcare Solutions’ announced acquisition of Greenway Medical Technologies for $632 million in enterprise value.

    Other notable deals in the segment included Zotec Partners’ acquisition of Medical Management Professionals, a medical billing and business management services company, for $202 million; and Medtronic’s acquisition of CardioCom, a provider of clinical telehealth services, for $200 million. 

    “Healthcare deal flow continues to be strong for companies developing proprietary technology/content, of scale in their markets, high revenue growth (double digit), high percentage of recurring revenue and large total addressable market opportunity. At the same time, demand for advertising support or sponsored journals and CME events is very soft,” said Tom O’Connor, Managing Director at Berkery Noyes. “The healthcare market remains highly fragmented, with lots of opportunities for entrepreneurs with unique ideas looking to start companies that solve important pain points along the healthcare continuum.

    “There are a lot of Healthcare IT companies experiencing operating momentum as healthcare providers, payors and life science competitors increasingly rely on them to structure and analyze data as well as engage patients,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “The M&A markets are currently an attractive exit option as the buyer universe has never been bigger and the debt markets are contributing to high valuation multiples.”

    Deal volume in the Pharma IT segment increased 33 percent year-to-date when compared to the corresponding period in 2012. “Attractive intellectual property (IP)-centric companies have been a primary focus for M&A activity,” stated Jeff Smith, Managing Director at Berkery Noyes.

    Monday
    Sep092013

    HEALTHCARE IT CONTINUES TO DRIVE DEAL VOLUME

    Berkery Noyes has issued its Healthcare/Pharma Information and Technology report for half year 2013. According to the firm’s research, deal volume decreased 16 percent since second half 2012. However, the number of deals was close to the industry’s historical average for 2011 when examined on a half year basis. The median revenue multiple over the past six months declined from 2.2x to 1.9x, while the median EBITDA multiple moved slightly from 9.8x to 10.2x.

    Roper Industries was responsible for the second highest value transaction in first half 2013 with the acquisition of Managed Healthcare Associates for $1 billion. Managed Healthcare Associates offers software and data analytics to pharmacies and long-term healthcare providers, amongst many other services. Roper Industries also completed the largest deal in full year 2012, acquiring Sunquest Information Systems for $1.39 billion.

    Healthcare IT remained the most active market segment in first half 2013, representing 40 percent of the industry’s aggregate volume year-to-date. Moreover, acquirers are showing strong interest in companies that facilitate healthcare information sharing and interoperability. Allscript’s acquisition of medical software provider dbMotion for $188 million was one such example in first half 2013.

    As for other notable deals in the report, athenahealth acquired Epocrates, a provider of point-of-care medical software applications, for $214 million. This was the highest value mobile-based healthcare deal throughout the past two-and-a half years. Meanwhile, the largest Pharma IT transaction backed by a financial sponsor in first half 2013 was JLL Partners’ acquisition of BioClinica, a provider of clinical trial management solutions, for $105 million.

    Wednesday
    Jan162013

    HEALTHCARE IT, LED BY STRATEGIC ACQUIRERS, DOMINATES TRANSACTION VOLUME IN 2012

    Berkery Noyes has disclosed its Healthcare/Pharma Information and Technology M&A Report for Full Year 2012.

    Total transaction volume increased 21 percent on a yearly basis. At the same time, aggregate transaction value rose five percent, from $11.36 billion in 2011 to $11.96 billion in 2012. The median revenue multiple improved from 1.5x to 2.3x, while the median EBITDA multiple increased from 9.0x to 9.8x. Private equity firms were responsible for four of the industry’s top ten highest value deals during 2012. The most active financial sponsor in the report over the past year was TPG Capital with five transactions. 

    The Healthcare IT segment, which saw an 11 percent increase in deal flow in 2012, accounted for 41 percent of the industry’s aggregate transaction volume. The segment had a median revenue multiple of 1.8x and a median EBITDA multiple of 9.6x. Strategic buyers represented 76 percent of the segment’s volume. 

    Meanwhile, transaction volume in the industry’s revenue cycle management subsector increased 37 percent from 2011 to 2012. One of the largest related transactions in 2012 was Sutherland Global Services’ announced acquisition of Apollo Health Street for $184 million. 

    M&A activity in the Medical Education segment rose 78 percent on a year-to-year basis, making it the segment with the largest volume increase. Regarding transaction volume in some of the industry’s other market segments, there was a 27 percent rise in Healthcare Business Services and a 35 percent improvement in Consumer Health Information between 2011 and 2012. 

    Thursday
    Nov082012

    DEMAND IN THE HEALTHCARE INDUSTRY REMAINS ROBUST AS SELLERS CONTINUE TO ATTRACT STRONG VALUATIONS

    Berkery Noyes has released its Healthcare/Pharma Information and Technology report for third quarter 2012.

    M&A activity year-to-date improved 19 percent compared to the first three quarters of 2011. However, both transaction volume and value fell seven percent specifically from second to third quarter 2012. The median revenue multiple from 2011 through the first three quarters of 2012 increased from 1.8x to 2.1x, and the median EBITDA multiple rose from 9.9x to 10.5x.

    “Legislative incentives continue to increase the velocity of deal flow in the healthcare IT M&A market,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Focuses on the interoperability and connectivity of clinical and financial information are heavily dependent on enabling technologies. The healthcare payor side of the business is seeing a lot of deal activity as health insurers continue to diversify revenue streams and acquire third-party vendors,” said Krieger. “Recent deal activity in the healthcare audit recovery niche highlights this trend.”

    The largest deal in the Healthcare IT segment in third quarter 2012 involved the healthcare provider laboratory market. “As highlighted by Roper Industries’ acquisition of Sunquest Information Systems for $1.4 billion, there is much interest in software solutions for the hospital and clinical laboratory markets. The opportunity to integrate data and workflow is a key strategic driver in the provider environment, and supports higher quality care, patient safety, and lower costs,” said Jeffrey Smith, Managing Director at Berkery Noyes. 

    Financially sponsored transactions accounted for 65 percent of industry wide transaction value in the first three quarters of 2012, compared to 59 percent in the same time period for 2011. “Both strategic and financial buyers are looking to acquire companies that are experiencing rapid growth,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies offering unique software tools and solutions and have scale, rapid revenue growth and recurring revenue models are receiving a premium acquisition price.”