1st Half 2017 Healthcare Industry Trends

1ST HALF 2017 KEY HIGHLIGHTS

  • Two of the top three and three of the top five highest value deals year-to-date occurred in the Pharma IT and Services segments. The largest of these was Pamplona Capital Management’s announced acquisition of PAREXEL International Corporation, a global biopharmaceutical services provider, for $4.92 billion.
  • The industry’s most active acquirer during the half year period was Bertelsmann SE & Co. KGaA with four transactions, each of which were completed through Relias Learning: WhiteCloud Analytics, a healthcare performance management technology company; Care Management Technologies, which offers evidence-based behavioral health analytics and decision support tools to payers and providers; Advanced Practice Strategies, an assessment, education, and analytics company that serves physicians and doctors; and Spm GmbH, which offers more than 300 courses for the acute and post-acute care sectors.

1ST HALF 2017 KEY TRENDS

  • Total transaction volume in 1st Half 2017 decreased by four percent over 2nd Half 2016, from 221 to 213.
  • Total transaction value in 1st Half 2017 rose by 31 percent over 2nd Half 2016, from $12.66 billion to $16.53 billion.
  • The median revenue multiple improved from 1.5x in 2nd Half 2016 to 1.9x in 1st Half 2017.
  • The segment with the largest rise in volume in 1st Half 2017 over 2nd Half 2016 was Consumer Health, which almost doubled, from 10 to 19 transactions. Pharma IT was close behind with a 75 percent increase, from 16 to 28 transactions.

M&A Market Overview

Berkery Noyes tracked 1,122 Healthcare/Pharma Information and Technology transactions between 2015 and 1st Half 2017, of which 236 disclosed financial terms, and calculated the aggregate transaction value to be $54.11 billion. Based on known transaction values, we project values of 886 undisclosed transactions to be $9.28 billion, totaling $63.39 billion worth of transactions tracked over the past two and a half years.

Disclosed median enterprise value multiples for all segments combined in this report during the last 30 months were 2.1x revenue and 11.6x EBITDA.