Healthcare Financial Insights
Noteworthy M&A Transactions – May 2021
June 23, 2021
The healthcare industry was on the move in May 2021. With M&A and investing at some of the highest levels since before the COVID-19 pandemic – our firm observed several high-profile transactions such as Collective Health, Vida Health and Noom collectively raising just under $1 billion, HealthcareSource’s recapitalization by symplr, and Vistria’s recapitalization of Medalogix and Muse Healthcare.
As we monitored other market activity for the month of May 2021, we noted three important themes from across healthcare M&A and capital markets:
- Shift to Patient-Centric Healthcare Garners Additional Momentum: Traditionally, healthcare organizations have lagged retail and other sectors of the economy that rapidly evolved to provide a seamless consumer experience. Today, leaders across the healthcare ecosystem are more focused than ever on engaging individuals in their healthcare journey and delivering services that coincide with heightened consumer expectations. With this focus shift, we have seen a tangible effect in the market as companies effectively engaging individuals in their personal healthcare journey and providing actionable insights around patient-centric initiatives continue to garner robust attention. This trend is likely to persist as health plans and providers alike seek to continually engage patients while maximizing satisfaction.
- The world is in Dire Need of Effective Mental Health Solutions: As the world begins to emerge from the grasp of COVID-19, individuals find themselves facing lasting implications characterized by a new virtual economy. Most notably, individuals continue to come to terms with daunting mental health challenges exacerbated by intense loneliness, economic uncertainty, fear and, in extreme cases, death. According to the 2020 Mental State of the World report, the percentage of respondents falling into clinical risk level nearly doubled from 14% in 2019 to 26% in 2020. The urgent need for effective solutions seeking to address the struggling mental health of individuals across the globe is more apparent than ever. Providers of behavioral health services and innovators in the space continue to strive to make this a reality, carving out a strong market presence in the process. Improved access, quality and affordability of behavioral health solutions is not a trend TripleTree sees slowing down in the near-term.
- Arrival of Healthcare Payments Revolution: With the explosion in out-of-pocket healthcare spending, the necessity for solutions simplifying the patient payment experience is tangible. By 2019, out-of-pocket spending had reached ~$1,240 per capita thus equating to ~$400B in health care spend by patients alone. The heightened spend has also been accompanied by increasing complexity, further confusing patients and straining collections by payers and providers. The need for solutions simplifying the patient payment process is clear, as 1 in 10 patients will not pay a bill if they do not understand the administrative process. Innovative payment companies, specifically focused on the healthcare sector, continue to garner attention as they seek to integrate payer and provider networks, streamline the patient payment process, and improve the ease with which participants are involved in clinical research.
Several transactions announced in May align with the above themes:
- Icario, a health action company that uses its proprietary technology, data science, and behavioral insights to connect people to health, announced that CVC Capital Partners, a global private equity firm, has acquired a majority interest in the company through the CVC Growth Partners II fund. The investment will be used to fuel Icario’s next phase of growth. TripleTree acted as the exclusive financial advisor to Icario.
- Press Ganey, a healthcare consumer and workforce engagement provider, announced the acquisition of SPH Analytics, a provider of member experience measurement and engagement for the health insurance industry. Through this acquisition, Press Ganey will combine its industry-leading patient experience data with SPH’s member experience data to bring holistic and powerful insights to the fragmented provider and payer landscape.
- SymphonyRM, developer of a healthcare CRM platform and data-driven analytics solutions intended to transform healthcare providers into member-focused enterprises, has raised $25M in Series B funding. The round is led by new investment partner TT Capital Partners, with continued investment from Adams Street Partners. SymphonyRM has raised $35M following the closing of its $10M Series A in 2019. SymphonyRM plans to increase its reach and footprint in the payer segment by leveraging data science and sophisticated AI to create the subsequent best actions that improve the member experience.
- Community Psychiatry Management, an independent US provider of outpatient behavioral health services, announced the acquisition of MindPath Care Centers, a provider of mental health counseling and therapy. Community Psychiatry and MindPath Care Centers share the same vision of providing comprehensive and individualized outpatient mental health treatment services to patients and expanding patient access to evidence-based, high-quality mental health care across the nation. TripleTree acted as the exclusive financial advisor to MindPath Care Centers.
- Headway, a creator of the first software-enabled national network of therapists, announced it secured $70M of funding in a Series B round. Led by Andreessen Horowitz, with Thrive, GV and Accel participation, the investment comes just six months after Headway’s Series A. The new capital brings total funding to date to $103M and gives Headway a new valuation of $750M. Headway is seeking to make quality mental healthcare accessible and affordable across the United States.
- Cedar, an innovative healthcare financial technology platform, entered into a definitive agreement to acquire OODA Health, a healthcare technology company focused on improving the consumer administrative experience with payers and providers, for $425M. By linking providers and payers onto one healthcare financial technology platform, Cedar will be the only complete solution addressing the full set of challenges consumers face when paying for healthcare.
- R1 RCM, a provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, signed a definitive agreement to acquire VisitPay, a digital payment solution provider, for approximately $300M in cash. With the added capabilities of VisitPay, R1 will be poised to lead the healthcare payments market in price transparency, flexible and personalized payment options, tailored communications and big data analytics across all settings of care.
- Thoma Bravo, a private equity firm focused on the software and technology-enabled services sectors, reached an agreement to acquire Greenphire, the global provider of financial lifecycle management software for clinical trials, from The Riverside Company. This acquisition is further validation of Greenphire’s strategy and the unique value they provide, particularly to pharmaceutical companies and contract research organizations, as the trend towards participant centric clinical trials accelerates.
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!