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The Healthcare Quarterly – Q3 2021 – 7 Mile Advisors

By Carolina D'Alencon | August 31, 2021

Automation Driving Technology & Services M&A

All sectors of the Healthcare industry – payor, provider, and life sciences; and the subsectors that serve them – are burdened by high volumes of repetitive administrative tasks. At best this drives up costs, and at worst it creates barriers to access, reduces patient and provider satisfaction, and creates opportunities for fraud, waste, and abuse. In the United States over ⅓ of total healthcare spend goes towards administrative expenses with the greatest opportunity for returns on investments in automation among payers. The greatest opportunity among providers is within revenue cycle management. While technology solutions to analyze, optimize, and automate workflows are becoming more available, the human capital to effectively implement these systems remains limited.  Furthermore, successful transformations rely heavily on intimate understanding of healthcare operations in addition to technology capabilities. These trends are driving increasing M&A activity between healthcare advisory firms, business process outsourcing (BPO) firms, and technology companies. This trend is most pronounced in payer services, revenue cycle management, and population health.

Bringing together industry leading HIT solutions and the specialized talent to deliver them to enterprise payer clients were the underpinnings of 7 Mile’s recent deal of CitiusTech’s acquisition of SDLC Partners.

The combination of healthcare technology and advisory presents a multitude of opportunities on both sides of the ledger, but the true benefit is to the customers. The data that can be collected when workflows are automated at scale and seamlessly integrated with adjacent operations creates a self-reinforcing cycle of performance improvement. Healthcare services companies are realizing historically high valuations while technology providers are accelerating growth and expanding capacity at still greatly accretive multiples.

These trends can also be seen in Tegria’s acquisition of Cumberland Consulting, the automation specialists Colburn Hill Group, and population analytics firm KenSci; CareCloud’s acquisition of Medmatica Consulting Associates; Sheridan Capital Partners’ merger of Simione Healthcare Consultants and BlackTree Healthcare Consulting to form SimiTree following their investment in DAS Health; and the combination of Datavant and CIOX Health.

It’s a unique time to be in the market. Contact 7 Mile Advisors Healthcare Team to discuss strategic growth options for your healthcare technology or services company.

7MA Healthcare Research

Notable industry transactions & insights into the Healthcare space.

7 Mile Advisors has released its breakdown of M&A and benchmarking activity in the Healthcare sector. Please see below for a listing of available research pieces:

Our research provides insights into the most recent market trends, M&A activity, valuation metrics, and sector outlook.

M&A Activity

Notable industry transactions & insights into the Healthcare space.

Colburn Hill Group, one of the Healthcare industry’s leading developers of analytically-driven robotic process automation (RPA) technologies for revenue cycle management (RCM) was acquired by Tegria. Tegria was launched by Providence in October 2020 to provide next-generation technologies and services to the Healthcare sector. This transaction comes on the heels of Tegria’s acquisition of Cumberland Consulting, a leading healthcare consulting and services firm. These acquisitions are exemplary of the trend highlighted above of automation technology organizations combining with consulting and advisory companies to enhance technology suites with service capabilities. Tegria further strengthened its portfolio of technology in June when it acquired leading healthcare artificial intelligence platform, KenSci.

BlackTree Healthcare Consulting, a provider of financial, operating, clinical, revenue cycle, and IT consulting to healthcare agencies, and Simione Healthcare Consultants, a consulting firm specializing in home and community-based care underwent a strategic and equal combination with the backing of Sheridan Capital Partners. The combination will allow the new combined entity, SimiTree, to better help post-acute providers navigate clinical and financial hurdles through consulting, outsourcing, and talent solutions.

Datavant, a provider of services enabling healthcare organizations to securely connect their data, and Ciox Health, the leader in clinical data exchange, merged in a blockbuster $7.0 billion transaction. The combined entity emerges as the largest U.S. health data ecosystem – enabling patients, providers, payers, health data analytics companies, patient-facing applications, government agencies, and life science companies to securely exchange their patient-level data.

Iodine Software, a leading healthcare AI company, completed two significant acquisitions in Q2 2021 – first of mobile-based physician engagement platform Artifact Health, shortly followed by that of competitor ChartWise Medical Systems. The Artifact Health transaction will enable Iodine to place its AI technology directly into the hands of providers across the U.S. and the acquisition of ChartWise will expand its reach in providing clinical documentation solutions for the Healthcare market.

Aviacode, a provider of medical coding and compliance services to hospitals and physician groups, was acquired by RCM technology solution-provider GeBBS Healthcare Solutions. The transaction supports GeBBS’ growth strategy oriented towards expanding its services, capabilities, and geographic footprint to provide end-to-end RCM services. GeBBS is backed by ChrysCapital, its financial sponsor focused on India-based opportunities.

See our latest Sectorwatch research reports for a comprehensive list of Healthcare industry M&A activity and valuation trends.

About 7 Mile Advisors

7MA provides specialized Investment Banking & Advisory Services to the professional service firms in the Consumer Products & Retail industries. We help our clients determine the right strategic partners for their businesses, transition ownership, raise capital, grow through acquisitions, and evaluate new markets. We advise our clients on M&A and private capital transactions, and provide unique market insights. Our team brings experience and energy to all of our engagements, with a focus on helping our clients navigate a changing marketplace.

To learn more about how 7 Mile Advisors can help you evaluate and execute on strategic M&A or private capital alternatives for your business, please visit our website


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