Market Update: Healthcare IT & Consulting Q1 2023
M&A activity within the broader Healthcare IT & Consulting ecosystem during Q1 2023 took a slight decrease in terms of deals quarter-over-quarter (QoQ) (-7.8%), lower than the decrease of the entire IT Services M&A market (-13.5%). In terms of capital invested, the market has also seen a decrease in the first quarter of the year of almost 50% QoQ as investors grapple with macroeconomic and interest rate headwinds. Nevertheless, over the last two years, the industry has seen both tremendous growth and M&A activity as the continued adoption of technology for payors, providers, and pharmaceutical firms stays strong. Given the current macroeconomic concerns investors have displayed some conservatism, but remain willing, eager, and able to compete for strong assets that help to complete strategic goals as organic growth slows.
Digital health technologies are forecasted to continue strong growth given the continued momentum driven by the adoption of new applications and solutions to streamline legacy systems and optimize total IT spending. Many technologies will likely focus on expanding access to care via an integrated experience and on generating data that can improve patient and population health. These advancements could lead to the development of digital health ecosystems that create much-needed connections between various stakeholders and meaningful health data. In addition, AI will probably have an increase in testing and drug development and tools that enable personalized care.
7MA has completed numerous M&A transactions for companies operating in the Healthcare IT & Consulting Industry and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Andy Johnston or Ben Garber if you would like to learn more about 7MA’s Healthcare IT & Consulting practice.