M&A Transactions

WebMD of NY is sold to KKR-backed Internet Brands for $2.8 billion; reflecting a 20% premium over a 30-day period.

Many of you may remember that WebMD was a Dot Com 1.0 pioneer back in 1996. It is amazing that the company has survived as long as it has. WebMD has soldiered on for decades through the thick and thin of consumer healthcare industry. For Internet Brands which have a respectable presence in the healthcare industry- albeit for low level services such as web hosting and practice management- this is a fantastic opportunity. Through “screen-less” technologies such as Alexa, consumer health is about to be massively re invented. WebMD has the right ingredients to become a next gen NLP-enabled consumer health 1.0 company. Lets see if they can keep re-inventing themselves.

PharMerica agrees to be sold to KKR and Walgreens (as minority shareholder) for $1.4B in an all cash transaction.

The company provides pharmacy management services to hospitals, skilled nursing and assisted living facilities. PharMerica has 96 institutional pharmacies, 20 specialty home infusion pharmacies and five specialty oncology pharmacies in 45 states. KKR paid a 17% premium over the market price. This sector is always ripe for performance improvements and operational optimization; something that private equity firms are very good at.

Warburg Pincus purchases A Place for Mom from General Atlantic and Silver Lake.

The company, based in Seattle, WA has been around since 2000. The heart of A Place for Mom is referral services helping individuals and family members in finding the right long term care/senior care facilities. The company has been very successful in building adjacent services around their core business. It is clear that the demographic shift where over 15% of our population is already over 65 will put great wind behind companies like this. 

PRA (Pharmaceutical Research Associates) acquires Symphony Health Solutions for $530 million.

The PA-based target data “bank” includes a vast collection of claims data and prescriber information for 280 million patients and 1.8 million prescribers. The company has 250 employees and 400 customers and is expected to generate $200 million in revenue in 2017. PRA is a CRO with $5.5B in enterprise value. The value of data was certainly coined when PRA competitor, Quintiles merged with IMS Health- which has a rich patient and prescriber data set- in a $17B transaction in May of 2016.

Allscripts purchases McKessons’ EHR, revenue cycle tools for $185 million.

The purchase price is pennies on the dollar for what McKesson spent on the assets. After selling its technology business to Change, McKesson has wiped the slate clean. Its ownership in Change will eventually be spun off. For Allscripts this is not a huge bet for what the company is getting in return for the money. The acquisition enhances Allscripts footprint. It brings decent RCM capabilities to a company with clinical focus.

Allscripts acquires NantHealth Patient & Provider Engagement Solution Business for $65 million.

When NantHealth went public we predicted that the company was too soon out of the gate. Now the company is embroiled in a series of lawsuits as its stock price is under severe pressure.

As for Allscripts, this transaction is more of a restructuring. In 2015, Allscripts paid $200 million for a 10% stake in NantHealth. The companies have agreed to exchange Allscript’s  ownership interest in NantHeatlh for the assets. 

Vestar Capital acquires Appleton, WI-based Quest Analytics.

Quest is a provider of software and consulting services to health plans and government agencies. Its solutions range from compliance monitoring, network management to quality and outcome studies. Vestar, for its part has been fairly active in healthcare. The company was a shareholder in Press Ganey, the patient survey firm, which was sold for $2.4 billion in October of 2016.

Decision Resources acquired Context Matters of New York.

Although the target had only raised a modest $5.0 million in capital, Context Matters has one of the most novel solutions for the evaluation of new products for the pharma industry. Through its platform, pharma companies can link drug development and market data through a sophisticated model making comparative analysis and contextual views possible for reviewing  reimbursement and market access. DRG is a subsidiary of Piramal Enterprises of India which is a $7.0B market cap diversified pharma manufacturer and services company.

RemitDATA bought by eSolutions.

eSolutions is a well-respected revenue cycle management solution provider to the long term care market. This is a great way for the company to expand its customer base. RemitDATA’s real time comparative analytics solution delivers clarity to the outpatient market on how to optimize reimbursements, staff productivity and payer performance. The company covers hospitals, ACS and ambulatory service providers and had raised total of $16.5 million before the sale.

Advisory Board (ABCO) could be sold in pieces.

Back in July we saw coverage of the break up of ABCO into two separate pieces. Optum has expressed an interest to buy the healthcare arm; leveraging ABCO’s provider relationship and Crimson’s dataset. Vista is reportedly ready to buy the education piece. Everybody was expecting an announcement by the end of July but it is all quiet in Washington, DC. Whatever transpires we do not believe that this company will stay independent. In many ways it reminds us of the faith that MedAssets experienced before selling to Pamplona Capital.

Waud Capital recaps Integrated Practice Solutions (Chiro Touch).

Based in San Diego, CA, ChiroTouch is a leading EMR company for the chiropractic industry. We like Waud. They have done well with similar businesses. And given the growth of the chiro market, we think that this is a timely investment.

AIM Specialty Health acquires Applied Pathways.

AIM, a subsidiary of Anthem, uses evidence-based clinical guidelines and real time decision support for radiology, cardiology and other disease areas. Applied is one of the top leaders in visual authoring and rules engine software in the healthcare industry. AIM currently uses Applied’s technology for simplifying complex clinical content into a standardized repeatable evidenced base systems for making decisions within AIM clinical program.

Vision Technologies Systems purchases Aethon based in Pittsburgh, PA for $36 million.

Aethon develops autonomous mobile delivery robot systems that deliver medication, meals and material. Vision provides broad based engineering services to a variety of industries.

Google buys Seattle-based health monitoring company Senosis.

The company is developing three distinct apps. One for measuring hemoglobin in the blood stream. The other is to screen for jaundice in newborns and the last one is for measuring lung function by blowing into the phone’s microphone. We are quite bullish on the idea that smart phones cameras, accelerometers and microphones will be foundations for multiple monitoring and diagnostic applications.

QSI’s subsidiary, NextGen, buys EagleDream for $26 million.

The Rochester, NY-based company, EagleDream is an analytics company that helps physicians to transition from fee-for-service to value-based reimbursement.

eMids buys Encore Health Resources based in Houston, TX.

eMids develops analytics for payers and providers. Encore Health’s main business is EHR implementation with supporting services such as quality measurement. The combination brings together the financial and clinical data.

Cotiviti purchases Roadmap for $70 million.

Cotiviti which used to be called Connolly is one of the largest revenue integrity companies in the U.S. The company’s anti fraud and risk management analytics are viewed as the industry’s best. Roadmap has multiple solutions for both providers and payers. Its platform helps the parties negotiate value based contracts and assess their risk sharing arrangement. Lets face it in the era of value based reimbursement, revenue integrity may get a lot more complicated. This is a great acquisition for Cotiviti.