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$6 Billion
in M&A Activity in 104 Transactions
Mercom Capital Group, llc, a
global communications and consulting firm, today released its annual and fourth
quarter merger and acquisition (M&A) and funding report for the healthcare technology
sector for 2011.
“2011 was a great year for
Healthcare IT companies in terms of financial activity. Almost half a billion dollars came into the
sector through venture capital investment compared to $211 million in 2010,”
said Raj Prabhu, managing partner of Mercom Capital Group. “Several factors,
including strategic acquisitions, consolidation and increasing market share,
played a role in the increased M&A activity in the sector.”
Health information management
companies received most of the disclosed VC funding in 2011, totaling $336
million in 30 deals. Personal health
record companies raised $83.3 million in 12 deals. The top VC funding deal in
2011 was $75 million, in a Series C round, raised by online doctor appointment
startup ZocDoc. Other top VC funding deals were $27 million raised by
Awarepoint, a provider of real-time location systems, $27 million raised by
ABILITY network, a web-based healthcare network, followed by $23 million raised
by Humedica, a clinical informatics company and $23 million raised by Practice
Fusion, a web-based EMR company (Practice Fusion also raised another $6 million
in additional funding in 2011).
Top VC investors in 2011 were HLM
Venture Partners with four deals, followed by Cardinal Partners, Chrysalis
Ventures, Founders Fund, Innovation Endeavors and Klein Perkins Caulfield &
Byers, with three deals each. There were a total of 104 VC investors in 2011,
compared to 62 in 2010.
Merger and acquisition
(M&A) activity was robust in 2011 with 104 recorded transactions totaling
$6 billion, compared to $4 billion in 85 transactions in 2010.
Health information
management (HIM) companies accounted for most of the M&A transactions with
61 transactions, followed by 19 transactions for revenue cycle management (RCM)
companies and 16 transactions for service providers. In terms of dollars, RCM
companies accounted for $3.9 billion, followed by HIM companies with $1.9
billion.
The top M&A transaction in 2011 was the
acquisition of Emdeon, a provider of revenue and payment cycle management and
clinical information exchange solutions, by Blackstone Capital Partners for $3
billion.
Other top M&A
transactions were the $960 million acquisition of Vangent, a provider of health
information technology and business systems to federal agencies, by General
Dynamics, the $400 million acquisition of HealthDataInsights, a healthcare
services company that specializes in the identification and recoupment of claim
overpayments, by HMS Holdings, followed by the $320 million acquisition of Sage
Healthcare, a supplier of business management software solutions by Vista
Equity Partners, and the $273 million acquisition of Vital Images, a provider
of advanced visualization and analysis software for physicians, by Toshiba
Medical Systems.
For a copy of Mercom’s 2011 HIT Funding and M&A Report, visit: http://www.mercomcapital.com/healthcareITreports.php
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