Mergers and Acquisitions: Uptick Noted

athenahealth (#34) purchased Anodyne Health (#91 last year) for $30 million with the goal of further bolstering its already strong analytic chops for the physician office.

Hyland Software (#70) stayed closer to its core, acquiring document management and coding tool vendors Valco Data Systems and eWebHealth.

Likely motivated by the obvious cross-sell potential, SaaS-based physician practice management vendor AdvancedMD (#82) purchased EMR vendor PracticeONE.

Hospital time and attendance vendor API Healthcare (#62) expanded to a near adjacency with its acquisition of workforce management and vendor management solution provider Clearview Staffing Software.

Similarly, Healthland (#59) made a small tuck-in acquisition, continuing its focus on critical access hospitals by purchasing American Healthnet.

Finally, QuadraMed (#40) left the public stage in a take-private transaction, acquired by the very active private equity investor Francisco Partners (which also owns the three active companies mentioned above).

With its seemingly bottomless pockets, pharma companies seem to remain everyone's favorite customer. Accordingly, there's been some software consolidation activity there as well.

Just what the doctor ordered? Pharma-related software activity increases as well.

With its seemingly bottomless pockets, pharma companies seem to remain everyone's favorite customer. Accordingly, there's been some software consolidation activity there as well. Oracle (#23) announced its intention to purchase clinical trial software vendor PhaseForward and market data leader IMS Health was finally taken private (after at least two or three attempts to sell) in a $5.8 billion sale to two private equity funds.

Looking forward

The HCIT M&A markets have definitely come roaring back, and there are already a fair number of sale processes underway (likely over a half dozen of the Top 100 even now). Given the robustness of the end market we're seeing from ARRA dollars flowing, I'd expect M&A volumes to reflect the optimism that drives it. Further, I'd look for some non-U.S. players to open their checkbooks so they can play here as well (hopefully, for their sake, with more success and discipline than we've seen in years gone by - see Misys/Sunquest or Siemens/SMS). As ever in this dynamic and complex sector, fortune favors the thoughtful, but not always the bold.

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, LLC, an HCIT advisory and consulting firm and serves on the editorial board of Healthcare Informatics. Healthcare Informatics 2010 June;27(6):42-44