The Mercom Capital Group report on funding and mergers and acquisition (M&A) activity for the Healthcare IT (HIT) sector during the third quarter of 2012 revealed that venture capital (VC) funding in HIT continued to be strong with $194 million going into 37 deals in Q3 2012. The strong uptrend that started in Q3 2011 has continued for five quarters in a row, according to Mercom. Fifty-eight different investors participated in these funding rounds with First Round Capital, Great Point Partners and West Health Investment Fund participating in multiple deals.
This quarter no Indian company made it to the healthcare IT VC funding or M&A activity list, proving that the Indian IT industry is yet to make their presence felt in this sector which is in great demand globally.
In Q3 2012, Health Information Management (HIM) companies received the most funding as a technology group with $101 million in 20 deals, followed by mobile health companies with $39 million in seven deals and social health network companies with $26 million in four deals. Within HIM, clinical decision support companies accounted for the highest number of deals by technology with three deals, followed by business and clinical intelligence, document management, population health management (PopHR), practice management solutions and radiology information system (RIS) companies all with two deals each.
“Financial activity continues to be strong in the HIT sector with a healthy number of early-stage deals,” explained Raj Prabhu, Managing Partner, Mercom Capital Group. “Mobile health and social health network companies had a strong showing this quarter.”
The top funding deal this quarter was the $25.5 million raise by Telcare, a mobile health company that uses cellular machine-to-machine technology for diabetes and other chronic illnesses. Other top deals included $20 million raised by Connecture, an online health insurance process automation company focused on health insurance exchanges, followed by $17 million raised by Doximity, a professional social network for physicians. Clinipace, an eClinical technology provider of real-time access to the healthcare information raised $13 million, and finally Streamline Health Solutions, a provider of enterprise content management and business analytics solutions for healthcare organisations and SoloHealth, a healthcare technology and data analytics company raised $12 million each.
There was continued strength in M&A activity in the sector as well, providing investors and companies with plenty of viable exit strategies. There were 37 M&A transactions in Q3 2012 amounting to $3.2 billion, of which only 10 transactions disclosed details.
Among the top M&A transactions, Roper Industries acquired Sunquest Information Systems, a provider of diagnostic and laboratory software solutions to healthcare providers, for $1.4 billion. One Equity Partners acquired M*Modal, a provider of clinical documentation services and speech understanding solutions, for $1.1 billion, Science Applications International Corporation acquired maxIT Healthcare, a healthcare IT consulting firm, for $473 million. Thomas Bravo acquired Mediware Information Systems, a provider of clinical software solutions, for $195 million.
EH News Bureau
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