M&A Transactions

Genoptix, based in Carlsbad, CA is sold to Ampresand Capital Partners and 1315 Capital

Genoptix was the commercial laboratory business of Novartis which it acquired in 2011 for $470 million. The company provides molecular profiling to oncologists and pathologists and offers clinical trial services to the bio pharma market. Novartis will retain the bio pharma business of Genoptix. Given the size of the funds involved in this transaction, we do not believe that this deal is of significant size.

Centauri Health Solutions buys Cleveland, OH- based Human Arc Corporation

Centauri provides a suite of software products that assess the current health status of Medicare, Medicaid and Health Insurance Exchange beneficiaries. Human Arc works with both providers and payers to help in identifying patients that could be eligible for government-sponsored health coverage or subsidies. The combined firms’ offering will cover 20 million beneficiaries with 650 employees across six regional offices. Silversmith Capital Partners led the investment.

Human Arc has been around since 1984 with an established base of clients and impressive profitability. Centauri, which was founded only in 2015, brings a new vision and technology to the combined entity. Classic case of an “oldco” and a “newco” joining hands to make a strong combination.

Wayne-PA based Bracket is purchased by the private equity firm, Genstar

Parthenon Capital first invested in the company in 2013. Bracket is a software company serving the pharma, biotech and the CRO sectors. Genstar just closed its eight fund with $3.9 billion of committed capital. The investment in Bracket is a good start.

Envision Healthcare buys Imaging Advantage based in Santa Monica, CA

Envision has turned M&A into an art commanding an enterprise value of $13.5 billion. The company is a serial acquirer in many different industries from medical transportation, physician services and staffing to running ASCs. IA is a teleradiology company armed with a decent analytics capability. Goldman Sachs Merchant Banking Division was one of the larger shareholders of IA.

nThrive expands outsourcing activity via acquisition of Towson, MD-based e4e Inc.

Since the Pamplona investment in nThrive (the old MedAssets), it seems that the company has been on an acquisition spree. E4e, established in 2000, e4e is an outsourcing company covering both payers and providers. Services include claims management, audit and cost avoidance solutions. Expect a lot more acquisition by this company. This is a classic case of taking an underperforming public company private and breathing new life into its business.

TeleTech Healthcare Solutions buys Connextions of Orlando, FL from OptumHealth for $80 million

Optum bought the company back in 2011 for $325 million. The company has a patient engagement platform serving insurers, employers and providers. TeleTech provides customer engagement across several verticals. After this acquisition healthcare will become the largest portion of their business with $300 million in revenue.

Ability Network buys ShiftHound based in San Diego, CA

Since its recap by Summit Partners in 2014 – purportedly for ~ $500 million, Ability has purchased six companies. These acquisitions have successfully diversified the business from the traditional Medicare connectivity and RCM services. ShiftHound, founded in 2008, is a workforce management company covering a variety of subsectors in healthcare from long term care facilities, hospice, to urgent care and veterinary. 

Ability has successfully evolved into one of the most dynamic and largest diversified HIT companies in the U.S.

Eliza, a patient communication and engagement company and based in Danvers, MA, is purchased by HMS for $170 million

HMS is a large public company in the business of benefit management/cost containment solutions on behalf of the government and insurers. By using Eliza’s outreach technologies, HMS is hoping to enhance its member communications and improve their analytics. This is a bit of a head scratcher for us but perhaps the data that Eliza can generate for HMS would be a good value in the long run.

Advisory Board is rumored to be eyeing a merger with Arlington, VA-based Evolent Health

It is hard to believe that it was only a few years ago that ABCO and others invested $100 million in Evolent.  The core value proposition of the company is helping health systems to migrate to value based care and population health management..

ABCO is a well-known name for research and best practices consulting across select industries. The company has been under considerable pressure to do something in the next generation healthcare space. But we all know that in that space, prices are high and the picking is slim. We think the combination of the two companies makes a lot of sense but the numbers do not add up.  This will not be an accretive deal and if done, shareholders are being asked to take huge leap of faith.

Afsaneh Naimollah

Xen Partners

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