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HealthTech Investment Resilient in the Face of Global Economic Slowdown

HealthTech Investment Resilient in the Face of Global Economic Slowdown

The latest Healthtech M&A Market Report from international technology mergers and acquisitions advisor, Hampleton Partners, revealed a final count of almost 100 deals in the healthtech sector in the second half of 2018.

Transaction volume remained steady compared to 1H2018, inching down by a mere six per cent and thus remaining in line with a remarkably stable trend since 2013. The trailing 30-month revenue multiple rose again to 2.8x EV/S, prolonging a trend visible over the last 18 months, since the increase to 2.8x in 2H2017 from a lower 2.1x EV/S in 1H2017.

In 2018, 186 healthcare companies went public, bringing aggregate gross IPO proceeds for the year to $24 billion, up from only $15 billion in 2017.

Largest healthtech transactions

The largest disclosed deals in the second half of 2018 included Veritas Capital and Evergreen Coast Capital’s joint private equity acquisition of athenahealth for $5.7 billion, at an attractive 17.3x EV/EBITDA. Athenahealth provides electronic healthcare record management SaaS for hospitals and healthcare practices in the U.S.

Second, at $1 billion, came the acquisition of M*Modal by 3M. M*Modal provides clinical documentation, transcription and EHR SaaS for the medical sector.

Dutch tech and health giant Philips remains the sector’s most consistently active acquirer, with a total of seven acquisitions over the past 30 months, including Blue Willow Systems and its tracking and alert-based systems for senior living facilities.

Jonathan Simnett, director and healthtech specialist at Hampleton Partners, said: “The rise of lifestyle diseases, an ageing population and higher patient expectations are compelling both public and private healthcare systems to incorporate technology to improve productivity, cost-efficiency and patient satisfaction.”

Key trends in healthtech

Healthtech in 2019

Jonathan Simnett concluded: “The M&A landscape in healthtech remains promising.  Big tech companies are entering the healthcare sector and healthcare professionals are keen to adopt technology that makes everything from transcribing patient notes, to diagnosis and treatment more effective and cost-efficient. New markets are being created by millions of consumers now monitoring their own health via apps and online programmes at home and on-the-go and by medical marijuana deregulation.

“Patient-oriented self-service healthtech billing and payment management, SaaS, EHR patient data and medical records systems will remain in particularly high demand by buyers, along with emerging blockchain applications which can improve the security and traceability of patient data, pharmaceuticals and surgical equipment.”

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