Healthcare Financial Insights

Noteworthy M&A Transactions – April 2021

May 24, 2021

April 2021 M&A activity highlighted continued momentum on several compelling themes:

  1. Cost Containment Remains at the Forefront for Payers and Providers: Following a turbulent year, payers and providers continue to focus on tools and technology that better predict and manage the cost of care. Payers often face a lack of visibility into the true cost of care delivery, and ultimately struggle to direct their members to the most appropriate site of care. In response to these headwinds, investors have shown an increased interest in technology that better aligns the various stakeholders throughout the diagnosis and delivery of treatment. These technologies span from enterprise systems, which seek to develop accurate and up-to-date member profiles to manage day-to-day needs like plan renewals, appointment scheduling, and medication support, to tools that focus on specific high-cost events such as surgical treatments. Scaling these systems effectively drives a more compelling ROI for payers while improving the patient experience.
  2. Specialty EHRs are Seeing Heightened Importance: Specialty electronic health records (EHR) continue to be highly attractive to both private equity groups as well as strategic buyers. COVID-19 exposed the lack of investment in EHR platforms which have become an important tool to promote efficient data sharing and improve the patient-provider experience. As both payers and providers seek to leverage patient data to drive efficiencies across the care continuum, it has become imperative for providers to have tailored, flexible EHR systems that integrate seamlessly into daily workflows. The market has continued to acknowledge a need for further investment in this space, showing a particular interest in specialty EHR platforms. Providers continue to identify inefficient EHR systems as a key pain point, with a recent study showing 38 percent of healthcare CIOs had “EHR optimization” as the top priority on their capital investment list. Although EHR platforms often require significant explicit and implicit costs upfront to integrate into practice management systems, they can deliver significant value in the long run when properly implemented.
  3. Deal Volume Continues in First Half of Year in Healthcare Staffing: Throughout 2020 and the first quarter of 2021, the healthcare staffing industry faced the incredibly difficult task of matching the supply of healthcare professionals against the strains of the pandemic-impacted demand. As states around the U.S. move closer to a post-pandemic world, both providers and payers are scrambling to understand the magnitude of backlog for deferred elective surgery and coordinate outstanding care needs for their members. Staff shortages across both acute and non-acute settings also drove higher levels of provider burnout and disengagement, while accelerated adoption of telehealth afforded healthcare professionals a more competitive set of employment opportunities. Amidst these challenges, deals continue to take place in the staffing market as both payers and providers seek to enhance their care coordination engines to drive patient outcomes. Staffing agencies continue to look for innovative ways to increase their flexibility, provide more options to their clients, and work as strategic partners to forecast new areas of need.

Several transactions announced in April align with the above themes:

  • TPG Growth, a San Francisco-based middle-market PE firm, made a significant investment in Implantable Provider Group (IPG), a leader in providing cost management solution to surgeons, facilities, and device manufacturers. TPG’s investment will allow IPG’s existing management team to continue to focus on its key value proposition, continue to serve their existing customers, and expand the existence of IPG’s geographic locations. TripleTree advised TPG Growth on the transaction.
  • Olive AI, a company that builds AI and RPA solutions for health systems to improve efficiency and reduce errors, has acquired Empiric Health, a Salt Lake City-based AI-powered clinical analytics and service company. The acquisition will bolster Olive AI’s capabilities that will now extend as far as supply chain and clinical analysis for surgeries. The transaction will help foster the growth of Olive AI’s mission to revolutionize the healthcare industry through AI.
  • KKR, a global investment company, acquired a majority interest in Therapy Brands, a leader in practice management, telehealth, and data collection tools focused on serving mental, behavioral, substance use recovery, applied behavior analysis (ABA), and physical rehabilitation healthcare providers. KKR acquired a majority interest from its existing shareholders, Lightyear CapitalOak HC/FT and Greater Sum Ventures. Alongside KKR, PSG will maintain minority ownership of Therapy Brands. TripleTree acted as a financial advisor to Therapy Brands.
  • Modernizing Medicine’s wholly owned subsidiary, Modernizing Medicine Podiatry Systems, acquired TRAKnet and other assets from podiatric electronic health records platform NEMO Health. With the recent acquisition of SammyEHR, the addition of TRAKnet’s specialty-focused technology and expertise further solidifies Modern Medicine’s position as the market leader in podiatry EHR software. Modernizing Medicine looks to further its innovation and offering in advanced EHR, practice management, and technology solutions to podiatrists and ultimately their patients.
  • Health Advocates Network, a provider of nonclinical staffing to healthcare organizations, expanded its offerings with the acquisition of Staff Today, a provider of clinical and nonclinical supplemental staffing services supporting governmental facilities in Los Angeles. The acquisition of Staff Today fits into the strategy of geographic expansion and market segment diversification.
  • GIFTED Healthcare, a provider of healthcare staffing services that offers per diem and travel nursing assignments across the nation, has announced the acquisition of Therapia Staffing, a provider of staffing services focused on nursing and therapy careers. The acquisition makes GIFTED one of the largest healthcare staffing companies in the U.S.
  • CareRev, a marketplace technology that connects hospitals and health systems with local, flexible healthcare professionals, has raised $50M in a Series A funding round. Transformation Capital led the round, while Industry VenturesGaingels, and private investors also participated. The proceeds will be used to invest in scaling its product and operations.

TripleTree and TT Capital Partners continuously monitor the market to identify the forces and themes impacting the healthcare industry. Thanks for reading and, as always, let us know what you think! 

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M&A, Transactions