Healthcare IT Introduction

Harris Williams (“HW”) as a Firm

  • 330+ professionals across eight offices globally
  • 140+ closed transactions in the last 24 months
  • 21st record year in 2018
  • 98% of revenue is from sell-side M&A advisory
  • 10 industry groups
  • 14 $1bn+ enterprise value engagements in the last 18 months

Technology, Media & Telecom (“TmT”) Group

  • 35+ professionals across Boston, San Francisco, and London
  • 50+ closed transactions since the beginning of 2016

TMT Vertical Focus Areas

  • Education Technology
  • Fintech
  • Healthcare IT
  • Human Capital Management
  • Internet & Digital Media
  • Manufacturing Technology
  • Membership Management
  • Public Sector Software
  • Supply Chain, Transportation & Logistics
  • Infrastructure and Security Software

Market Commentary

  • Healthcare technology assets continue to garner significant interest from both strategic and financial sponsors, as increasing regulatory complexity, ongoing technology adoption by constituents across healthcare, and the pervasive evolution towards value-based care underpin growth opportunities for innovative software tools
  • Continued investor appetite for specialty and sector-specific EMR and revenue cycle management solutions, as providers demonstrate a clear preference for purpose-built, best-of-breed solutions
  • Healthcare organizations continue to extend their focus beyond price and quality of care, with an increasing focus on patient and provider engagement and educational tools
  • Sector innovations continue to target niche operational challenges including patient and staff management and monitoring, and compliance control solutions for vendors and clinicians
  • Increasingly complex reimbursement arrangements in the face of rising healthcare costs have supported strong payer interest in specialized cost containment and payment integrity solutions

Healthcare IT Taxonomy

Patient-Facing Solutions

  • Member Onboarding / Portals
  • Patient Outreach & Campaigns
  • Patient Engagement / Education
  • Digital Wellness Tools
  • Benefits & Consumer-Directed Healthcare Tools
  • Information Tools & Online Media

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Care Delivery

  • Operational Efficiency
  • Inpatient – Clinical
  • Outpatient – Clinical
  • Post-Acute – Clinical

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Pharma & Devices

  • Development
  • Trials
  • Commercialization
  • Adherence
  • Regulatory

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Revenue Cycle Management

  • Charge Capture & Coding
  • Claims Management
  • Adjudication / Appeal / Review
  • Payment Processing
  • Patient Collection
  • Other RCM Tools
  • Regulatory & Analytics

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Population Health & Risk Management

  • PHM Informatics
  • Data Aggregation & Normalization
  • Privacy / Security
  • Information Sharing / Interoperability
  • Population Analytics
  • Care Coordination

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Recent Representative HW HCIT Transactions

screen_shot_2019-06-05_at_4.04.05_pm.pngProvider of GRC solutions for healthcare, life sciences, and higher education

 

 

 

screen_shot_2019-06-05_at_4.05.00_pm.pngProvider of healthcare-specific workforce management software

 

 

 

screen_shot_2019-06-05_at_4.05.29_pm.pngProvider of market access and formulary information to pharma, payers, and providers

 

 

 

screen_shot_2019-06-05_at_4.07.44_pm.pngProvider of healthcare credentialing and payer enrollment solutions

 

 

 

screen_shot_2019-06-05_at_4.08.22_pm.pngProvider of education and GRC solutions

 

 

 

screen_shot_2019-06-05_at_4.08.55_pm.pngProvider of SaaS solutions to the behavioral health industry

 

 

 

screen_shot_2019-06-05_at_4.09.29_pm.pngProvider of population health management solutions

 

 

 

screen_shot_2019-06-05_at_4.09.57_pm.pngProvider of incident reporting and risk management software

 

 

 

screen_shot_2019-06-05_at_4.10.30_pm.pngProvider of athlete training services

 

 

 

screen_shot_2019-06-05_at_4.11.47_pm.pngProvider of patient engagement solutions

 

 

 

screen_shot_2019-06-05_at_4.12.29_pm.pngProvider of cost containment solutions for healthcare payers

 

 

 

screen_shot_2019-06-05_at_4.12.58_pm.pngProvider of online nutrition coaching and certifications for wellness professionals and consumers

Case Study: iContracts

HW’s TMT Group advised iContracts on its acquisition by RLDatix, a portfolio company of TA Associates and Five Arrows.

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Relevant Healthcare IT Sub-Sectors

  • Policy Management
  • Contract Management
  • Revenue Management

Company Overview

iContracts is a leading cloud-based governance, risk, and compliance (“GRC”) platform with horizontal applicability and established footprints in healthcare, life sciences, and higher education. iContracts provides a comprehensive suite of solutions to aggregate contracts and policies, author, edit, and review key provisions, and drive adherence, enabling customers to minimize revenue leakage, increase operational efficiency, and ensure regulatory compliance.

Key Value Drivers

  • Technology-driven platform that leverages proprietary workflow and automation capabilities, configurable metadata markers, and standardization tools
  • Market-leading footprint and blue-chip customer base across pharma, healthcare, and higher education markets
  • Substantial growth opportunity in existing vertical markets through cross-sell opportunities and broadening of product suite
  • Focused and actionable strategy for vertical expansion into highly regulated and complex end markets
  • Strong financial profile with significant organic and inorganic annual rate of return growth, expanding margins, solid retention, and low customer concentration
  • Highly talented management team with a strong track-record of operational excellence

HCIT Public Market Observations1

As of March 31, 2019

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Public Comparables

Valuation and Operating Metrics1

As of March 31, 2019 ($ in millions)​

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Select Healthcare IT M&A Transactions1

Philips’ Acquisition of Carestream Health’s HCIS Business

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  • Carestream’s healthcare information systems business is a provider of imaging IT solutions to multi-site hospitals, radiology services providers, imaging centers, and specialty medical clinics around the world
  • Carestream’s imaging platform includes best-in-class VNA, diagnostic and enterprise viewers, multimedia reporting, workflow orchestrator, and business analytics tools
  • The acquisition expands Philips’ healthcare IT business to feature Carestream’s enterprise imaging platform as part of its broad portfolio, which builds upon its world-class technical excellence and continued innovation offered to customers

Tabula Rasa Healthcare’s Acquisition of PrescribeWellness

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  • PrescribeWellness is a provider of cloud-based patient relationship management solutions
  • The Company facilitates collaboration between more than 10,000 pharmacies with patients, payers, providers, and pharmaceutical companies
  • The acquisition supports Tabula Rasa’s goal of expanding medication risk mitigation programs in community pharmacies and providing community pharmacists with clinical revenue opportunities beyond dispending, as well as further participation in Medicate Part D Medication Therapy Management programs.

3M’s Acquisition of M*Modal’s Technology Business

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  • M*Modal is a leading provider of cloud-based, conversation AI-powered systems that connect workflows for efficient and accurate medical speech recognition, medical transcription, clinical documentation improvement, and coding
  • The Company’s solutions enable physicians to spend more time with patients and provide a higher quality of care
  • The acquisition of M*Modal’s technology business builds on 3M’s strategic commitment to invest in and expand its Healthcare Information Systems business through offering additional revenue cycle management and population health capabilities

EBSCO Health’s Acquisition of HealthDecision

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  • HealthDecision is a provider of clinical decision support and shared decision making software for clinicians and patients at the point of care
  • The Company’s software platform enables advanced exploration of medical options while combining the patient’s healthcare preferences, the clinician’s expertise, patient-specific medical data, and the latest medical guidelines
  • The acquisition advances EBSCO Health further into offering a breadth of content through an evidence-based foundation of data

TrialCard’s Acquisition of RxSolutions

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  • RxSolutions is a provider of customized pharmaceutical reimbursement programs for commercial and clinical supply organizations
  • In addition to traditional pharmaceutical co-pay programs, RxSolutions has introduced RxStudy Card, which offers an innovative way to streamline supply management for pharmaceutical manufacturers conducting clinical trials
  • An acquisition of RxSolutions strengthens TrialCard’s presence in the pharmaceutical marketplace, while diversifying its customer base and expanding into the clinical trial space

What We’re Reading

How Machine Learnings Can Help Prevent Hospitalizations

Forbes  March 27, 2019

Preventable hospitalizations cost people, insurance companies, businesses, the government, and society considerable time, effort, and resources, that could have otherwise been allocated to more productive activities. Working to combat this preventable waste, along with not exposing patients to other potential diseases or medical issues during hospital stays, organizations are adopting artificial intelligence to reduce preventable hospitalizations. For example, machine learning algorithms can look for combinations of symptoms, medication usages, and physical exam measurements to identify potential patient concerns or areas to deploy preventative care.

Read the full article here.

FHIR, Cloud, Pop Health, and Social Determinants Spark New Security Challenges

Healthcare IT News  March 20, 2019

Technology trends today are allowing increased accessibility into health data, and its exchange, which demands new ways of thinking about how to protect sensitive information. New dimensions of risk when it comes to cybersecurity are also being introduced, as trends move towards interoperability and the use of AI, increased patient autonomy through mobile devices, and patient data sharing. As cloud computing becomes more prevalent given the increased efficiencies at a lower cost, third-party risks, lack of understanding, and data protection come to the forefront of potential concerns.

Read the full article here.

Industry Facing Headwinds in a "Perfect Storm" of Disruption

Healthcare IT News  March 18, 2019

A new survey shows trends such as consumerism and social determinants forcing providers and payers to fundamentally rethink how care is delivered and reimbursed. Given the changing environment towards increased access, convenience, and cost transparency for consumers, healthcare organizations are positioning themselves where patient experience and population health management are essential keys to success. While not all healthcare providers are incorporating social determinant data yet into their population health efforts, those that are have seen healthier patient populations along with increased reimbursements and revenue.

Read the full article here.

How Interoperable Data and a Renewed Focus on Wellness is Transforming Business Models

Deloitte  March 5, 2019

As the health insurance industry continues to evolve, transformational changes are expected as the sector transitions from a treatment-based model to a model focused on wellbeing and prevention. This new model within the industry will have a critical focus on data, and data interoperability, with the caveat of consumers owning their own data and level of or lack of willingness to share. According to industry research, as the health plan business model transforms, focus will be pulled away from claims processing and risk management, and re-focused on wellbeing and care of delivery, care enablement, and the underlying data platform.

Read the full article here.

Using Telehealth to Conduct Medication Reconciliation

Modern Healthcare  March 2, 2019

Given the fast paced environment in emergency rooms, one challenge noted by New York-Presbyterian/Weill Cornell Medical Center is the tedious yet critical process of performing a thorough medication reconciliation for patients being triaged. Performing a proper medication reconciliation can lead to the prevention of adverse drug events, which occur in nearly 5% of hospitalized patients. In order to combat this issue, organizations such as NY Presbyterian have expanded telehealth teams of pharmacy technicians alongside computer-aided decision support to conduct virtual consultations across multiple emergency sites and outpatient units.

Read the full article here.

M&A Transaction Activity

Select Recent M&A Transactions1

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Private Placement Transaction Activity

Select Recent Private Placement Transactions2

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Patient-Facing Tools - Landscape

Representative Provider, Payer, and Consumer Tools

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To view full market map please contact: *TMT_HCIT@harriswilliams.com

Select HW TMT Transactions

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1. FactSet
2. PitchBook

 

The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: hwgermany@harriswilliams.com). Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.