Healthcare Financial Insights
Noteworthy M&A Transactions – March 2021
April 27, 2021
March 2021 M&A activity highlighted several compelling themes:
- Continued Activity Across Home Health: The healthcare challenges triggered by COVID-19 heightened the focus on in-home care providers and the impact they can have with patients. Over the past year, patients, payers, and providers increasingly looked for ways to avoid unnecessary exposure to COVID-19, while still providing the requisite medical care for the individual. Furthermore, seniors’ increased desire for care in the home, an improving reimbursement environment for higher-acuity care in the home, exponential growth of telehealth, and an ability to significantly reduce care costs are further tailwinds driving investor interest in home health assets. Additionally, the anticipated trend of consolidation has continued as companies transition to the new payment models, including the Patient Driven Payment Model (PDPM) and Patient Driven Grouping Model (PDGM). Companies that successfully navigated this transition have been able to expand and rise above competitors, while attracting investors.
- Tech Solutions Enabling a Better Care Coordination Experience: Much of today’s care coordination efforts are hampered by outdated software and business practices, leading to wasteful spending and breakdowns in patient care. An NEJM Catalyst study reported that over 60 percent of organizations consider their care coordination as only “somewhat coordinated” or worse. Advanced analytics and artificial intelligence (AI) have proven to drive better care at lower costs across a variety of care settings. Care coordination companies leveraging proven, advanced technologies are attracting significant investor interest. By using predictive analytics and reporting, providers can begin to work together, improving clinical care and the ultimate care transition process.
- Significant Public Markets Interest in New-Aged Medicare Advantage Startups: Investor interest in Medicare Advantage (MA) is not new; however, in recent weeks, a number of high-profile MA-focused companies garnered significant public market valuations, including Oscar Health, Agilon Health, and Alignment Healthcare. Between a rapidly aging population, a shift away from traditional Medicare, and lower costs, the Medicare Advantage market continues to attract both well established players and startups alike. These new-aged MA offerings have differentiated themselves through enhanced member experience platforms, unique provider relationships, and virtual care settings that have lowered cost and improved outcomes. As MA plans continue to rise in popularity, companies that are able to optimize quality and build unique and effective plan designs will be best positioned to capitalize on continued market interest.
Several transactions announced in March align with the above themes:
- DispatchHealth, a provider of in-home medical care, announced it has secured an additional $200M in Series D financing in a round led by Tiger Global, less than one year after closing a $136M Series C round. This latest investment brings the company’s total funding to more than $417M and raises its valuation to $1.7B. DispatchHealth will use the funding to expand its platform for in-home medical care to a total of 100 markets and ensure its Advanced Care line of service is widely available in the US.
- HealthPro Heritage, a Maryland-based provider of customized therapy solutions for skilled nursing, senior living and home health providers, announced it has been recapitalized by WellSpring Capital Management. The Company, which has over 12,500 professionals delivering services across 42 states, plans to use the proceeds to fund the next stage of growth and development.
- Appriss, a Clearlake Capital-backed provider of prescription drug monitoring programs, announced the acquisition of PatientPing, a patient care collaboration technology company, for approximately $500M. PatientPing provides software that allows healthcare providers to collaborate with one another on their shared patients.
- Viz.ai, a provider of care coordination software, has raised $71M in Series C funding in a round led by Scale Venture Partners and Insight Partners. Viz.ai aims to accelerate the expansion of its Intelligent Care Coordination AI platform beyond stroke care and into other areas of acute care such as cardiology, pulmonary and trauma. This round brings the company’s total funding to over $150M since inception.
- Oscar Health, a provider of direct-to-consumer online health insurance products and services, raised over $1.4B in an IPO by offering 37M shares at $39 per share. Oscar is refactoring health care with the goal of improving customer experience by building trust through engagement, personalized guidance, and rapid iteration. The NYC-based company has grown membership to over 500,000 Americans across 290 counties since being founded.
- Agilon Health, a senior-focused value-based care platform for primary care physicians, filed to raise up to $1B in an IPO by offering 47M shares at a price range of $20 to $23 per share. Capitalizing on emerging value-based care opportunities, Agilon’s model provides the necessary capabilities, capital, and business model for existing physician groups to create a Medicare-centric, globally capitated line of business.
- Alignment Healthcare, a provider of Medicare Advantage plans to seniors, raised nearly $500M in an IPO by offering 27M shares at $18 per share. Alignment provides Medicare Advantage plans that are customized to meet the needs of individual seniors. Its current product portfolio consists of tailored products that account for factors such as health condition, socioeconomic status, and ethnicity.
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!