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    Entries in Tom O'Connor (17)


    TOM O’CONNOR TO SERVE AS EXPERT PANELIST DURING TELEHEALTH WEBINAR is hosting a webinar on Thursday, September 28th that will focus on telehealth. Tom O’Connor, Managing Director at Berkery Noyes, has been invited to speak as an expert panelist.

    Telehealth is hailed as a way for healthcare providers to save money, as a solution to the physician shortage, and as a way to meet the healthcare needs of rural communities and hospitals.

    Opponents argue the quality of care is not the same. As state legislatures continue to redefine rules for telehealth companies, investors are signing on to fund local and regional networks.

    The webinar will cover the following topics:

    - Who’s building networks, who’s buying and who’s selling
    - What is affecting current valuations
    - Emerging trends and new players entering the market
    - Expert panelists’ views on the headwinds and tailwinds at play in this market

    As for other recent events, Tom also participated in BDO's Breakfast Networking Healthcare focused dealmakers series, which brought together leaders from some of the most active private equity firms and investment banks in the 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.



    Managing Director Tom O’Connor was recently invited to speak at Duke University. Duke hosted its first annual Medical Entrepreneurship Conference, with guest speakers from across the Research Triangle providing insight on Biotechnology, Healthcare Venture Capital, Pharmacology, Medical Devices, and other topics.

    An overview of his presentation is available here.



    Berkery Noyes' Healthcare report for full year 2015 indicated that total transaction volume increased 15 percent on a year-to-year basis. Aggregate value gained four percent, from $16.44 billion to $17.08 billion. Regarding valuations, the median revenue multiple improved from 2.4x to 2.7x, while the median EBITDA multiple remained nearly constant at 13.8x.

    Deal volume in the Healthcare IT segment improved 21 percent in 2015. The Healthcare IT segment accounted for almost half of the industry’s aggregate volume, and strategic acquirers comprised 82 percent of the Healthcare IT volume.

    Notable Healthcare IT transactions in the top ten list included IBM Watson Health’s acquisition of Merge Healthcare Incorporated, a provider of medical image handling and processing, interoperability and clinical systems, for $1.03 billion; and Cardinal Health’s acquisition of Navihealth, a post-acute care software company that helps physicians manage bundled payments, for $290 million.

    Other high profile Healthcare IT deals outside the top ten were Computer Programs and Systems’ acquisition of Healthland, a provider of integrated technology solutions to rural community and critical access hospitals, for $250 million; Quality Systems’ acquisition of HealthFusion, a developer of web-based, cloud computing software for physicians, hospitals and medical billing services, for $165 million; and Roper Industries’ acquisition of Strata Decision Technology, a cloud-based financial analytics and performance platform that is used by healthcare providers, for $140 million.

    Upon examination of other markets covered in the report, the segment with the largest yearly rise in volume was Medical Education, which more than doubled from 18 to 39 transactions. The Healthcare Business Services segment experienced a 19 percent increase, from 81 to 96 deals. M&A activity in the combined Pharma segments declined 17 percent, from 52 to 43 acquisitions.

    “For all the recent talk of increased deal flow, there still remains a lack of high-quality opportunities of scale in the market today,” said Tom O’Connor, Managing Director at Berkery Noyes. “However, once an attractive opportunity of scale comes out there is no lack of buyers at robust prices. The credit environment is still favorable for attractive deals of scale, particularly those where a high percentage of revenue is recurring.” O’Connor added, “Companies of scale with rapid revenue growth are perfect bolt-ons for strategic buyers, and many of the large private equity groups have come down market looking for new platforms to buy and build.”

    According to Jonathan Krieger, Managing Director at Berkery Noyes, "Strategics continue to acquire businesses to build out their product portfolio and broaden their customer footprint. Healthcare constituents continue to seek niche software vendors that promote interoperability, structure clinical data, improve outcomes and reduce costs."



    According to Berkery Noyes’ Healthcare report for first half 2015, total deal volume increased 16 percent relative to second half 2014. Transactions completed by strategic acquirers rose from 138 to 163 deals, whereas those backed by financial sponsors improved from 52 to 57 deals. Aggregate value fell 43 percent, from $10.70 billion to $6.06 billion. However, value gained 24 percent on a year-over-year basis. Also of note, seven of the industry’s top ten largest deals last year occurred in second 2014.

    The peak for volume throughout the previous two-and-a-half years occurred in first half 2015 while value reached its zenith in second half 2014. In terms of valuations, the median revenue multiple over the past six months decreased from 3.0x to 2.7x, which remained slightly above its median throughout the last 30 months.

    Transaction volume in the Healthcare IT segment remained about constant, with a total of 101 deals. This represented a 29 percent increase compared to first half 2014 and was the segment’s highest point throughout the past two-and-a-half years. Moreover, there was a 16 percent rise in the number of strategic acquisitions in the Healthcare IT segment, from 69 in second half 2014 to 80 deals in first half 2015. Strategic acquirers accounted for 79 percent of Healthcare IT volume year-to-date.

    The Consumer Health segment saw a slight uptick, from 14 to 16 deals. Clothing manufacturer Under Armour was a notable Consumer Health acquirer with two mobile-based acquisitions in first half 2015 relating to digital health data, nutrition information, and fitness tracking. Along these lines, Under Armour acquired MyFitnessPal for $475 million and Endomondo for $85 million. These two transactions will build upon Under Armour’s previous acquisition of MapMyFitness for $150 million in 2013.

    “In the rapidly changing healthcare information/technology marketplace, both strategic and financial buyers are on the hunt for attractive acquisitions of scale,” said Tom O’Connor, Managing Director at Berkery Noyes. “Companies with good scale, recurring revenue, and high growth rates with a large addressable market opportunity, whether they are healthcare information/education/technology providers, revenue cycle management, point-of-care information solutions, or one of many other attractive niches, are in high demand from both private equity and strategic buyers.” 

    “The industry is undergoing a rapid transformation and structural shifts due to reform, cost pressures, shifting responsibilities between payors and providers, and in increased regulatory environment,” stated Jonathan Krieger, Managing Director at Berkery Noyes. “Private, best-of-breed technology-enable healthcare IT companies that effectively address market niches and have some level of scale are in high demand by both financial and strategic buyers.”