Global M&A dollar value and deal count increased in 2019, ↑36% and ↑10%, respectively. Similarly, U.S. M&A dollar value and deal count in 2019 was up ↑9% and ↑29%.
Global Private Placements dollar value was ↓26% from 2018 and deal count in 2019 was ↑5%. US total sector Private Placements showed similar trends; dollar value declining ↓32% and deal count increasing ↑14%.
In North America, the Digital Health M&A deal count of 214 transactions in 2019 decreased by 14% vs. 2018. 2019’s results registered the lowest level of activity in 5 years. Q4 in 2019 deal count was flat compared to Q3 and also on QoQ basis compared to Q4 2018. The largest deal in Q4 was Google’s announced acquisition of Fitbit for $2.1 billion.
For the full year (FY) 2019, HIM/Workflow Management was the most active and the fastest growing in terms of deal count, followed by EHR/PM/PHR. These two subsectors were also the most popular in Q4. Most sub-subsectors’ deal counts declined, especially for Imaging, Patient Engagement, and Payer/Provider Spending Analytics.
Private Placement transactions in the N. American Digital Health sector decreased in 2019 ↓27% and total announced deal volume ↓34% YoY. Disclosed dollar investments in N. American based HIT firms was $5.9B in 2019 vs. $9.0B in 2018.
The Patient Engagement sub-sector was the most popular in terms of deal count but declined by more than 50% compared to its deal activity in 2018. EHR/PM/PHR subsector was the fastest growing ↑43%.
Q4 Private Placement transactions in the N. American Digital Health sector increased in the number of transactions (↑37%).
There were 3 Digital Health IPOs and one corporate spin-off in 2019 compared to 2 IPOs in 2018.
Except for Phreesia, the other IPOs suffered a sharp decline in share prices shortly after listing which suggests aggressive IPO valuations of the companies. Change Health, a spin-off of McKeeson, recovered toward the end of 2019, becoming a relatively top performer, ↑9%
For 2019, Novahill’s Digital Health Public Comparable Index gained 14% but underperformed the S&P 500 Index by 15%. This year’s performance shows a similar trend in the past five years except for the year of 2018, when Novahill’s Digital Health Public Comparable Index’s outperformed the S&P Index.
Trends Section (pg. 12) highlights the growing presence of mega tech companies like Google & Amazon in the Digital Health sector.