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HealthTech Heartbeat – Q3 2019 Market Review

By Henry Barnes 22 Oct 2019

Welcome to the Q3 2019 HealthTech Heartbeat review – Results International’s quarterly market update of the global healthtech sector covering both biopharma and healthcare IT.

Highlights in the quarter:

  • Q3 M&A transaction volume was the highest of any quarter so far in 2019 and up 30% on Q3 2018. Most notably, Waystar, a US-based revenue cycle management software company, was both on the buy and sell-side in the healthtech market: acquiring Digitize.AI, a healthcare AI-enabled ERP, prior to being acquired themselves by EQT and CPPIB for a reported $2.7bn (the largest disclosed M&A transaction this quarter) – Bain Capital will retain a minority stake.
  • Activity from UK-based companies was particularly strong this quarter across both M&A and fundraisings.
    • Healthtech M&A – FPE acquired Kallik, a UK-based labelling and regulatory compliance solution for the medical devices and pharmaceutical industries; UK-based Experian acquired MyHealthDirect, a digital coordination platform for financial and administrative healthcare tasks; and ClearCourse acquired UK-based e-clinic, a clinic workload automation and workflow management system – its 13th acquisition since inception in October 2018.
    • Healthtech Fundraisings – UK-based remote consultations provider Babylon Health followed on from its previous Series B round in April 2017, with its largest raise to date, a $500m Series C round led by Saudi Arabia’s Public Investment Fund, valuing the business at over $2bn – one of the largest fundraises the European and US healthtech sector has seen in many quarters. BenevolentAI, a UK-based AI-enabled drug development and discovery company, secured $90m following its $115m round in April 2018; however, at a reported valuation $1bn below the prior offering.
  • Bruker made its second foray into the healthtech space this year, following its acquisition of LIMS player Arxspan in Q1 2019 (advised by Results International), acquiring PMOD Technologies, a preclinical and molecular imaging software for clinical research organisations.
  • Both Health Catalyst, US-based a healthcare data and analytics solutions provider and Livongo, a US-based provider of digital health management for chronic conditions, listed on Nasdaq in the quarter. The former had previously raised a $100m Series F round in February at a valuation of $1bn and its share price has gained c.22% over the quarter following its listing. We have now seen three meaningful IPOs, including Change Healthcare, in the healthtech market this year.

The outlook for 2019 remains positive with M&A and fundraising activity very healthy. As a result, now is an excellent time to be contemplating fundraising, exit or growth through acquisition in the space – if you are, please do get in touch.

Henry Barnes

Analyst

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