Healthcare IT M&A 2011

Two final transactions remind us that those who forget history are doomed to repeat it. First, we saw Sage divest its physician office software business to Vista Equity Partners for $320 million and rename it Vitera (#36), Tampa Bay, Fla. This is in contrast to the $565 million that Sage paid when it acquired Medical Manager in 2006. Interestingly, Vista also owns Sunquest (#40), Tucson, Ariz., sold to it at a loss by Misys, as well as an interest in Surgical Information Systems (#88), Alpharetta, Ga., which it recapped at a profit in late 2010. Next, adding to the income of corporate name consultants, if not value to providers of care, Redmond, Wash.-based Microsoft (#24 in 2011) and GE Healthcare (#23), Chalfont, St. Giles, UK, announced their 50-50 joint venture, Caradigm. Which high purchase price assets from earlier HCI 100 lists will be placed there remains to be seen, but as a long time HCIT watcher, I’m afraid I cannot be too optimistic on the likely outcome. 

As mentioned, I would have expected more high profile transactions this past year than we actually saw, given the high expectations and valuations, but perhaps that is exactly why they did not occur. Many high value companies sought exits in 2011, only to close down their sales processes when bidders weren’t willing to accommodate their hopes and dreams. Instead, execution, delivering high-quality products to customers and patients remain the rule of the day. Ben Rooks (ben@st-advisors.com) spent 15 years on Wall Street as both an equity research analyst and investment banker focusing on HCIT. He is the founder of ST Advisors, an HCIT-focused advisory firm serving both companies and their investors and serves on the editorial board of Healthcare Informatics. ST Advisors is proud of its past work with both Clairvia and Mediware; however, as of this writing, is not actively engaged with any company listed above. ST Advisors and Healthcare Informatics appreciate the supplemental M&A data provided by Leerink Swann.