Coronavirus Boosts M&A Activity In Healthtech Sector

• Healthtech deal volume increases, valuations still at peak levels
 

London, UK – 8 October 2020.The first Healthtech M&A market report to be published by Hampleton Partners since the outbreak of Covid-19 stresses the serious impact of coronavirus on healthcare systems around the world.

The health emergency and the need for social distancing have accelerated the shift to digital, speeding up the implementation and adoption of healthcare apps, telemedicine and web-based resources. This has continued to drive both M&A volumes and values across healthtech, according to the international technology mergers and acquisitions advisor.

Covid-19 has accelerated the implementation & adoption of health apps, telemedicine & web-based resources, according to Hampleton’s latest report.

Healthtech transaction volume is on the rise, with 131 transactions recorded in the first half of 2020. This upward trend, after a significant dip in 2016 and 2017, has taken us back to the peak levels observed five years ago.

Healthtech valuations have been high for the best part of the past five years. In the first half of 2020, the trailing 30-month median EV/S multiple dipped slightly to 3x following a 4x peak in 2H2019. Despite previous volatility, EBITDA multiples are still very high, coming in at 17.7x in the first half of 2020.

This growth has been driven particularly by high valuations in the Healthcare Vertical Software segment   which saw 88 deals closed in the first half of the year – a 20 per cent increase on the last reporting period.

Given the concern over respiratory illnesses as a result of Covid-19, the June acquisition by Airehealth of BreathResearch, a healthcare firm that detects fluctuations in respiratory health, was no surprise.

Its VitalBreath virtual care software helps patients, caregivers and clinicians to be more informed, respond faster, leading to fewer emergencies and hospitalisations. Through the deal, AireHealth adds to its capabilities all of BreathResearch’s assets including employees, intellectual property, research and patents related to respiratory drug delivery, medication and analysis of breathing sounds using machine learning and artificial intelligence.

Jonathan Simnett, director, Hampleton Partners, said: “Over the past six months the pressure on health systems has reached unprecedented levels as the Covid-19 pandemic has extended its grip globally.

“Forced to ration services and cancel treatments, and with a vaccine still some way off, healthcare providers are having to turn to new technologies in their efforts to maintain, let alone enhance, future healthcare services for patients adjusting to their new, digitally-enabled lifestyles.”

The top three deals by disclosed deal value were:

• Veritas Capital acquisition of health and human services assets of DX Technology - $5 billion
• Teladoc Health acquisition of InTouch Health - $600 million
• Align Technology’s acquisition of Global Holdings GmbH - $417 million

Jane Henry
Email: jane (at) marylebonemarketing.com
Mob: +44 789 666 8155

Note to Editors:
Hampleton Partners’ M&A Market Reports are compiled using data and information from the 451 Research database (www.451research.com).

Download the full Hampleton Partners’ Healthtech M&A Market Report 2H2020: https://www.hampletonpartners.com/reports/healthtech-report/.

Hampleton Partners is at the forefront of international mergers and acquisitions and corporate finance advisory for companies with technology at their core. Hampleton’s experienced deal makers have built, bought and sold over 100 fast-growing tech businesses and provide hands-on expertise and unrivalled advice to tech entrepreneurs and companies which are looking to accelerate growth and maximise value.

With offices in London, Frankfurt, Stockholm and San Francisco, Hampleton offers a global perspective with sector expertise in: Artificial Intelligence, Autotech, Cybersecurity, Digital Commerce, Enterprise Software, Fintech, Healthtech, HR Tech, Insurtech and IT & Business Services. 

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