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‘Perfect Storm’ Driving $10bn of Deal in HealthTech

The latest Healthtech M&A Report from international technology mergers and acquisitions advisors, Hampleton Partners, reveals how the ‘perfect storm’ of rapidly converging digital technologies and societal changes, coupled with the entrance of tech giants, such as Amazon into the healthcare and medical systems market, is driving intense innovation and M&A activity in the Healthtech sector.

A wave of deals delivered disclosed amounts of nearly $9.5bn, up 140 per cent year-over-year.

Express Scripts’ $3.6bn acquisition of eviCore healthcare, the health benefit and claims management market serving 100 million people, topped the table as the Healthtech sector’s largest deal in 2H 2017.

The next largest deal was KKR-backed Internet Brands’ purchase of WebMD for $2.8bn. This brought a string of popular online health websites, including Medscape.com; DentalPlans.com and AllAboutCounseling.com under one umbrella company. KKR also closed a $1.45 Billion health care strategic growth fund during the same period.

North America led the way in Healthtech M&A, with 77 out of the 100 announced deals driven out of the U.S., to help meet the huge domestic demand and ability to thrive in the competitive private healthcare market.

Jonathan Simnett, director, Hampleton Partners, said: “Advanced healthcare systems around the world are struggling to deal with the perfect storm of spiraling costs allied to rising patient expectations, more expensive treatments, and the consequences of dealing with ageing populations and chronic lifestyle diseases.

“This vast healthtech sector where patient care systems have remained largely unchanged for decades is experiencing a seismic shift in funding and technology innovation. The customer care and logistics expertise that comes with Amazon’s market-moving plan to offer healthcare services is an indication of just how big this shift is going to be,” continued Simnett.

Other key points from the Hampleton Healthtech M&A Market Report:

As for the coming year, Hampleton expects a raft of new players into the healthcare M&A market, driven by the likes of Amazon, Apple and Google, which have access to consumers, devices, data and vast resources to drive change even in a highly-regulated market.

Hampleton anticipates that the incumbents’ response to new competitive pressure will be to increase the intensity of their M&A activity with a resulting upward pressure on valuations.

Hampleton healthtech M&A expertise

During the period, Hampleton advised on the sale of BaseCase Management GmbH, a data visualisation software as a service (SaaS) company, headquartered in Berlin, Germany, with offices in New York, on its sale to Princeton, New Jersey-based Certara, the global leader in model-informed drug development and regulatory science.

As budget pressure on healthcare providers increased, the healthcare industry is under increasing pressure to demonstrate the value delivered by new medications and devices. BaseCase’s interactive platform improves how life science companies communicate and present that value, whether to C-suite executives, physicians and healthcare providers, or payers and health authorities.

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