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Health IT M&A Extremely "Active" in 2013

July 23, 2013
by Rajiv Leventhal
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For the first half of 2013, health information technology was the most active market segment of the healthcare/pharma IT industry for mergers and acquisitions, according to a report from New York-based investment bank Berkery Noyes.

Health IT accounted for 63 transactions, 40 percent of the industry's aggregate volume in the first six months of the year. Moreover, acquirers are showing strong interest in companies that facilitate healthcare information sharing and interoperability, the report said. Allscript's acquisition of medical software provider dbMotion for $188 million was one such example in first half 2013.

According to Berkery Noyes' research, deal volume decreased 16 percent since second half 2012. However, the number of deals was close to the industry's historical average for 2011 when examined on a half year basis. Transaction value increased 58 percent, from $5.08 billion in second half 2012 to $8.03billion in first half 2013. This rise was largely attributable to BC Partners' announced acquisition of Springer Science & Business Media, a scientific, technical, and medical (STM) publisher, for $4.42 billion.

As for other notable deals in the report, athenahealth acquired Epocrates, a provider of point-of-care medical software applications, for $214 million. This was the highest value mobile-based healthcare deal throughout the past two-and-a half years.

"The breadth of acquirers for HIT companies continues to expand as buyers look to capitalize on the size, rapidly evolving dynamics and growth characteristics of the healthcare market," Jonathan Krieger, managing director at Berkery Noyes, said in a statement. "Acquirers are aggressively looking to broaden product suites, leverage distribution channels, and realize revenue and cost synergies."

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