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Mercom
Capital Group, llc, a global communications and consulting firm, today released
its report on funding and mergers and acquisition (M&A) activity for healthcare
IT sector for the first quarter of 2012.
Venture
Capital (VC) funding in the healthcare information technology (HIT) sector
continued on a strong positive trend that started in the third quarter of 2011.
VC funding in Q1 2012 was $184 million in 27 deals, the highest number of deals
ever recorded since Mercom started collecting data in Q1 2010. A total of 46 different VCs invested in Q1 and Connecticut
Innovations was the only VC to participate in multiple deals. The Health Information Technology for Economic and
Clinical Health (HITECH) Act kick started this larger implementation of IT in
healthcare in the United States after it was passed in 2009.
”We are seeing significant momentum in terms of private
venture capital funding flowing into the HIT sector, and a robust M&A
environment is providing investors and the industry with liquidity and viable
exit options,” said Raj Prabhu, Managing Partner of Mercom Capital Group. “Since
the first quarter of 2010, M&A transactions have outpaced VC funding
transactions by almost two to one (98 VC funding deals, 223 M&A transactions),
a positive sign for the industry.”
 As a
technology group, health information management (HIM) companies came out on top
with $103 million followed by personal health record (PHR) companies with $32
million. In terms of number of deals, PHR companies had four, business and
clinical intelligence companies also had four, clinical decision support
companies had three, electronic medical record (EMR) companies had two and
electronic health record (EHR) companies also had two.
Top VC
funding deals in Q1 included $40 million raised by Kinnser Software, a provider
of clinical support software to home health companies, followed by $22 million
by Healthx, a provider of online healthcare portals and communication products
to insurers, medical providers and employees. Other top deals were $14 million
raised by Sharecare, an interactive health and wellness social platform, $12
million raised by DocuTAP, a provider of integrated EMR and practice management
solutions, and $10.9 million raised by PerfectServe, a provider of clinical
communication services.
M&A
activity in the healthcare information technology sector was also strong with
34 M&A transactions, only three disclosing details, amounting to $653
million. HIM companies accounted for most of the transactions totaling 15.
The M&A
transactions with disclosed details were Verisk Analytics’ acquisition of
MediConnect Global, a provider of proprietary systems to facilitate aggregation
and analysis of medical records, for $349 million, Nuance Healthcare’s
acquisition of Transcend Services, a provider of transcription and clinical
documentation services, for $300 million, and DexCom’s acquisition of SweetSpot
Diabetes Care, a cloud-based health data company focused on clinical support
software in diabetes, for $4.5 million.
To
download all funding transactions for HIT for Q1, visit: http://mercomcapital.com/healthcareITreports.php
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