Obamacare, Technology Advances Keeping Healthcare M&A Hot

The healthcare information and solutions market continues to see transactions at robust multiples and that M&A momentum should carry through next year, said Tom O’Connor, Managing Director at Berkery Noyes. O’Connor said there is a tremendous interest in healthcare technology and solutions companies from both strategic and financial buyers as the industry continues the shift from paper based to digital solutions / IT based solutions. He said the Medicare market is highly regulated and failure to comply is costly, as errors affect quality of care leading to increased need for Medicare software and solutions that ensure compliance. 'The ACA (Affordable Care Act) and the regulatory environment today is pushing change in healthcare from Americans getting older to people getting out of hospitals to lower costs, better care and more access,' said O’Connor. O’Connor said the greatest demand is for healthcare information solutions that are employing SaaS-based (Software as a Service) subscription strategies, especially those with recurring revenues models. In his view, acquirers are looking for opportunities that increase reimbursement/revenue, ensure compliance and lower costs. Strategic buyers are flush with cash and looking to make investments to jump-start revenue growth in their core markets and move into concentric markets where they can upsell and cross-sell to the same or similar customer base, according to O’Connor.