Artem Mamaiev, Associate at Corum Group

The number of M&A deals in the HealthTech market decreased to 244 deals, from 310 in 2020–PE’s made 45% of that number of deals; it’s way higher than in previous years. The amount spent in the space raised almost four times, skyrocketing from $34B spent in 2020 to nearly $125B in 2021, a record high for the year. It was driven by the larger megadeals in the space–particularly, recent acquisitions of Healthtech giants Cerner and athenahealth for $28B and $17B accordingly. Median multiple in Healthtech followed up to almost 4x revenue from 3x revenue in 2020. Sellers offering solutions in virtual care, clinical trial management, EHR/EMR and healthcare systems, including sensors for remote monitoring, saw the highest valuation multiples.

Buyers continue to consolidate the market, eager to pay higher multiples for the next-gen mature tech, that is particularly applicable for another megadeal in the space - clinical workflow software solutions provider, ProVation Medical, which was bought for $1.4B at an estimated 13 times revenue by Fortive, bolstering its healthcare solutions portfolio and broadens the client base. Among other representative deals, open-source practice EHR management and billing SaaS, DrChrono, was acquired by EverCommerce for $183M to enable mobile and web-based capabilities to its customers. Meditation app developer Headspace paid $3B to acquire a virtual mental health support platform, Ginger, to form HeadSpace Health, combining teletherapy services with guided meditation offerings.

In summary, the pandemic continues to drive innovation and M&A activity in Healthtech. Even though the number of deals decreased in 2021, the size of the deals speaks for itself–$125B spent in 2021.

2022 Healthtech M&A drivers:

  1. Digital Healthcare platform providers are eager to become one-stop-shop solutions – Kareo/PatientPop merger.

  2. AI adoption for healthcare – Nuance/Microsoft and BKMedical/GE deals.

  3. Digital women’s health market is growing, especially pregnancy and fertility support – PeriGen/Halma deal.

  4. IoT for Remote Patient Monitoring – Capsule/Phillips deal.

  5. Mental healthtech is on the rise, so we’ll see more and more deals here – Ginger/HeadSpace deal.

  6. Billing and claims RPA – Kareo/PatientlySpeaking deal.

  7. Healthcare Cybersecurity – CyberMaxx/Periscope Equity and SecMaker/Pointsharp deals.