A CB Insights report has tabulated digital health mergers and acquisitions from the past few years which total 619 from the start of 2013 through the first half of 2017. Aside from revealing that there’s been loads of activity in this sector since 2013, it also called attention to health IT vendor Allscripts, which is the largest buyer of digital health businesses of them all with seven M&A deals in the past four years.
So what did they buy? Allscripts’ purchases have been all about extending the capabilities of its EHR, extending its footprint and adding more services. In 2013 it made back to back acquisitions. One was the $235 million deal for dbMotion, a health IT business that enables healthcare companies to take data from different electronic health records systems and normalize it to a common data structure. That allows hospitals to access clinical intelligence and helps patients access their data in one place.
On the heels of that deal, Allscripts bought Jardogs for an undisclosed amount. Jardogs gave Allscripts a set of patient engagement tools. The company gives patients access to a portal to send and receive information to and from doctors, hospitals, and other healthcare organizations, giving them access to EHRs, test results and doctors’ notes.
More recently, Allscripts acquired McKesson’s health IT business Enterprise Information Solutions in a $185 million deal, which doubled the number of Allscripts’ hospital clients in the U.S. The assets from that deal include Paragon EHR, a lab analytics and blood bank, revenue cycle solutions (STAR and HealthQuest), and content management solution, OneContent.
Last year, Allscripts acquired a majority stake in behavioral health record provider Netsmart for $950 million through a joint venture with GI Partners.
Telus is another electronic health records vendor albeit a Canadian one. Its portfolio of six companies spans Medesync, which developed cloud and mobile technologies to help physicians more easily connect to EMRs from any computer or mobile device to pharmacy management business XD3 Solutions.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Roper Technologies has acquired five businesses in the past few years. In 2015 it acquired lab information management business CliniSys and Atlas Medical, which is known for its diagnostic testing analytics tools from Sunquest Information Systems.
Five deals seem to be a sweet spot for several companies. In addition to Roper, other businesses with five acquisitions in the same time period include athenahealth, Welltok, IBM and Toronto-based Constellation Software.
Although a few of athenahealth’s acquisitions have focused on companies in its marketplace, a couple of which went through its accelerator program More Disruption Please, it’s also acquired larger companies. In 2013, it slapped down for $293 million for Epocrates , a developer of point of care medical apps. Praxify Technologies, which athenahealth acquired in a $63 million deal this year, has clinical intelligence tools to make workflows more manageable will be integrated into the marketplace. Last year it made its first acquisition from its accelerator with Arsenal Health, which developed a predictive analytics program that helps practices anticipate which patients will cancel medical and dental appointments or won’t show up at all. That deal was followed by care coordination business Filament Labs which trades as Patient IO.
Welltok has cultivated a portfolio of companies with technology to support wellness programs through its Cafe Well Health Optimization platform for self-insured employers and health plans. In 2014, it acquired Mindbloom, a digital health gaming technology developer with the purpose of making its wellness platform more interactive. It added big data analytics business Predilytics in 2015 to better understand consumer behavior. It acquired Keas to supplement its employer wellness offering last year.
To check out the full list, follow this link.
Given the activity we’ve seen so far this year, it wouldn’t be surprising to see more crossover in this list in another four years with pharma and genomics companies joining the ranks of companies in the market for digital health businesses.
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