Healthcare Financial Insights
Noteworthy M&A Transactions – October 2020
November 23, 2020
October 2020 M&A activity highlighted continued momentum on several compelling themes:
- Public Market’s Appetite for Telemedicine and Virtual Care Continues: Throughout the last eight months, it is no secret that traditional care delivery methods have been challenged amidst the COVID-19 pandemic. TripleTree has previously discussed several responses by healthcare providers to combat this, including increasing utilization of and access to telemedicine and virtual care. As traditional visits have become more difficult, providers have worked to quickly deploy virtual and telemedicine solutions, with consumers rapidly adopting these new solutions. In recent months, investors in both private and public markets have signaled an interest in deploying capital to enable these solutions, as evidenced by significant M&A activity and favorable performance of virtual care-oriented public companies. In October, public markets in particular expressed strong and continued interest in virtual care and telemedicine as a number of significant mergers closed or were announced.
- Solutions Driving Clinical, Financial, and Administrative Efficiency will be Key in a post-COVID Environment: The economic implications of COVID-19 will likely be felt far beyond the pandemic. With added strain on the healthcare system lasting into the foreseeable future, cost-cutting and increased efficiency has become imperative. In recent months, providers have become financially strained, clinical standards have risen, and administrative burdens have increased across the care continuum. This has led to a heightened need for solutions that drive efficiencies across all core areas of a provider’s operations: clinical, financial, and administrative. As demand for their services increases, large players in the space have gone on an acquisition spree, driving consolidation in the industry. Furthermore, private equity investors have taken note, powering a strong wave of investment and recapitalizations in October.
- Strong Need for Technologies and Services that Support Post-Acute Care Delivery: At a time when an ever-increasing share of healthcare interactions are taking place in post-acute settings, the need for solutions and technology that support post-acute care delivery is rising. Post-acute healthcare providers require unique, customized solutions that help them navigate the nuances and intricacies of this growing care delivery model – many of which are not mirrored in acute care settings. These needs include electronic visit verification, care coordination across payers and providers, increased oversight and compliance, and more. Given this wide range of needs, an array of solutions has arisen to meet this demand, with large industry players and private equity groups driving investment and consolidation in the space. This trend continued in a big way in October, as a number of high-profile transactions in the space took place.
Several transactions announced in October align with these themes:
- Teladoc Health, a global leader in virtual care, announced that it completed its merger with Livongo, a provider of virtual chronic condition management solutions. The company expects to directly deliver 10M+ virtual visits this year and has reported an additional 3M enabled visits for its health system clients so far in 2020.
- Hims, Inc. (“Hims & Hers”), a telehealth company offering men’s and women’s health and wellness products, and Oaktree Acquisition Corp, a special purpose acquisition company, announced that they have entered into a definitive merger agreement. Upon completion of the transaction, the combined company’s securities are expected to be traded on the New York Stock Exchange under the symbol “HIMS.”
- SOC Telemed, a national provider of telemedicine technology and solutions, announced that it has completed its business combination with Healthcare Merger Corp., a special purpose acquisition company. SOC Telemed offers an enterprise-wide platform to hospitals, health systems, post-acute providers, physician networks, and value-based care organizations.
- RLDatix, a portfolio company of Five Arrows and TA Associates, has acquired Verge Health, a portfolio company of TT Capital Partners. Verge Health is a governance, risk, and compliance platform that drives provider efficiency through increased compliance and patient safety. RLDatix is a solutions provider that partners with healthcare delivery organizations globally to provide a comprehensive view of enterprise risk through a safety-first lens. TripleTree served as financial advisor to Verge Health.
- Surgical Information Systems (SIS), a provider of business and clinical surgical software for ambulatory surgery centers (ASCs) and hospitals, announced that it received a majority equity investment from Accel-KKR, a leading technology-focused private equity firm. SIS provides business office management, clinical documentation, and patient communications tools that meet the unique needs of ASCs. TripleTree acted as the sole financial advisor to SIS.
- Clearwave, a provider of digital check-in and eligibility verification services, announced its acquisition of Odoro, a provider of digital patient-access solutions for healthcare providers, physician practices, and healthcare systems. By combining Odoro’s patient-scheduling functionality with its digital check-in technology, Clearwave will deliver a comprehensive patient-engagement platform designed to enhance the patient experience and improve cash flow for providers.
- WellSky, a provider of software and analytics solutions to post-acute care entities, acquired CarePort Health, a care coordination software provider that connects acute and post-acute providers and payers. WellSky and CarePort Health, formerly a subsidiary of Allscripts, will jointly facilitate more effective patient care transitions across the continuum — driving better outcomes for patients, providers, and payers.
- Netsmart, a provider of software to behavioral health and post-acute care providers, announced the acquisition of Tellus, a Florida-based provider of electronic visit verification and claims processing technology. Tellus’ solutions are designed specifically for the home health, long-term care, and state and human services markets.
- PharMerica completed the acquisition of OnePoint Patient Care (OPPC). OPPC is one of the nation’s largest providers of dedicated hospice pharmacy and pharmacy benefits management (PBM) services to hospices. OPPC serves more than 350 unique hospice providers.
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!
- Noteworthy M&A Transactions – September 2020
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