Healthcare IT Introduction

Harris Williams (“HW”) as a Firm

  • 340+ professionals across eight offices globally
  • 170+ 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
  • 26 $1bn+ enterprise value engagements in the last 24 months

Technology, Media & Telecom (“TmT”) Group

  • 35+ professionals across Boston, San Francisco, and London
  • 50+ closed transactions since the beginning of 2017

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 evolution towards value-based care underpin growth opportunities for innovative software tools
  • Sector innovations continue to target niche operational challenges including patient and staff management and monitoring, and compliance control solutions for vendors and clinicians
  • Investor appetite for specialty and sector-specific EMR and revenue cycle management solutions continues 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 pursuit on patient and provider engagement and educational tools
  • Increasingly complex reimbursement arrangements in the face of rising healthcare costs are supporting 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_2019-07-08_at_3.47.34_pm.pngProvider of EDI and revenue management software solutions

 

 

 

screen_shot_2019-07-08_at_3.48.08_pm.pngProvider of GRC solutions for healthcare, life sciences, and higher education

 

 

 

screen_shot_2019-07-08_at_3.48.44_pm.pngProvider of healthcare-specific workforce management software

 

 

 

screen_shot_2019-07-08_at_3.49.21_pm.pngProvider of market access and formulary information to pharma, payers, and providers

 

 

 

screen_shot_2019-07-08_at_3.49.54_pm.pngProvider of healthcare credentialing and payer enrollment solutions

 

 

 

screen_shot_2019-07-08_at_3.50.20_pm.pngProvider of education and GRC solutions

 

 

 

screen_shot_2019-07-08_at_3.50.52_pm.pngProvider of SaaS solutions to the behavioral health industry

 

 

 

screen_shot_2019-07-08_at_3.51.37_pm.pngProvider of population health management solutions

 

 

 

screen_shot_2019-07-08_at_3.52.12_pm.pngProvider of incident reporting and risk management software

 

 

 

screen_shot_2019-07-08_at_3.52.45_pm.pngProvider of athlete training services

 

 

 

screen_shot_2019-07-08_at_3.53.14_pm.pngProvider of patient engagement solutions

 

 

 

screen_shot_2019-07-08_at_3.53.51_pm.pngProvider of cost containment solutions for healthcare payers

Case Study: iContracts

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

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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 to facilitate compliance and improved outcomes
  • 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

Relevant Healthcare IT Sub-Sectors

  • Policy Management
  • Contract Management
  • Revenue Management

HCIT Public Market Observations1

As of June 30, 2019

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Public Comparables

Valuation and Operating Metrics

As of June 30, 2019 ($ in millions, excl. stock price)​

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Select Healthcare IT M&A Transactions1

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Dassault Systemes’ Pending Acquisition of Medidata Solutions

  • Medidata is a provider of SaaS-based clinical development solutions to life science organizations
  • The Company has a blue-chip customer base including 18 of the top-25 pharmaceutical companies and nine of the top ten largest contract research organizations
  • The acquisition of Medidata strengthens Dassault’s integrated business platform bringing an end-to-end approach to research and discovery, development, clinical testing, manufacturing, and commercialization of new therapies and health technologies

 

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Ares Management and Leonard Green & Partners’ Pending Acquisition of Press Ganey

  • Press Ganey is a provider of safety, quality, patient experience, and workforce engagement solutions to healthcare organizations
  • Press Ganey’s solutions are used by over 41,000 healthcare facilities to address safety, clinical excellence, patient experience, and workforce engagement
  • Following the acquisition, Press Ganey will leverage Ares and Leonard Green Partners’ resources to enhance investment in product innovation and pursue strategic acquisitions

 

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eSolutions’ (Francisco Partners) Acquisition of Practice Insight

  • Practice Insight is a leading provider of integrated electronic data interchange (EDI) and revenue cycle management (RCM) workflow solutions for healthcare providers
  • The Company partners with hundreds of leading healthcare practice management software vendors to deliver increased transparency, convenience, and reimbursement flexibility to more than 70,000 healthcare providers in all 50 states
  • The acquisition enhances eSolutions’ RCM footprint within the ambulatory and outpatient specialty sector, in addition to adding proprietary claims clearinghouse capabilities

 

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JPMorgan Chase & Co.’s Acquisition of InstaMed Communications

  • InstaMed is a provider of a cloud-based platform for payment processing between patients, healthcare providers, and payers
  • InstaMed leverages a private cloud technology to securely facilitate payments and associated patient data seamlessly between providers, patients, and payers.
  • The acquisition further solidifies the efforts of JPMorgan Chase in expanding its healthcare payments business, while simplifying the billing experience for healthcare consumers

 

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RL Datix’ (TA Associates / Five Arrows) Acquisition of iContracts

  • iContracts is a leading cloud-based provider of a governance, risk, and compliance (GRC) management platform with horizontal applicability and established footprints in healthcare, life sciences, and higher education
  • The Company’s solutions provide customers with a structured framework for storing, reporting, and analyzing a vast amount of unstructured text from policy, procedure, and contract documents
  • The acquisition catalyzes RL Datix’ entry into the broader GRC space with iContracts’ leading policy management capabilities to allow organizations to take action on the root cause of incidents via implementation of policies and procedures

What We’re Reading

Humana Asked Experts to Define Value-Based Care: They Couldn't Do It

Fierce Healthcare  June 14, 2019

In a recent study around the definition of value-based care, panelists from University of Pennsylvania, Humana, and the Robert Wood Johnson Foundation were able to agree on some characteristics around the concept, such as the idea that outcome and cost would be the determinant across both individual and group populations of care. However, the overall group was unable to come to a consensus around the term’s true definition. Humana began this endeavor with the hopes to continue to move forward with significant initiatives in cost reduction and improved outcomes, while also bridging the communication gaps with insurers.

Read the full article here.

House Votes to Overturn Ban on National Patient Identifier

Modern Healthcare  June 13, 2019

The U.S. House of Representatives recently passed a $99.4 billion HHS appropriations bill with several amendments, including reversing a longtime ban on developing a national patient identifier, and allocation of money directed toward opioid overdoses in hospital emergency departments. The final report also adds $10 million to the previous year’s budget for certification reviews of hospice centers and nursing homes and increases funding by $52 million for the Hospital Preparedness Program, an initiative that coordinates state, local, and territorial health departments to get ready for patient surges during public health emergencies.

Read the full article here.

Patients Say Physicians with Mobile Apps Are Faster, Convenient, Offer Better Communication

Healthcare IT News  June 11, 2019

While security concerns remain at the forefront, the healthcare industry is continuing to explore a wide range of digital and mobile application transformation in patient interactions. While many patients believe mobile application usage can cut down on wait times and provide a more convenient experience, adoption of mobile-based services still has barriers, and about 67% of patients prefer in-office visits over telehealth services. One over-arching theme collected in the survey noted that over 80% of patients believe that the onus should be on physicians to keep security standard high and protect proprietary patient data.

Read the full article here.

Humana to Integrate IntelligentRX into Epic's E-Prescribing Workflow

Healthcare Finance  June 11, 2019

Humana is becoming the first national insurer to collaborate with Epic, a widely-used EHR system, to bring together patients, providers, and insurers in a value-based model. IntelligentRx, Humana’s real-time benefits check tool, will integrate into Epic’s e-prescribing workflow to deliver immediate pharmacy data to allow for evidence-based decisions contingent upon patients’ individual medical coverage. With interoperability as one of the key healthcare challenges today, this integration will further increase the breadth, quality, and timeliness of healthcare data exchange.

Read the full article here.

Florida Legislature Passes New Telehealth Law Addressing Licensing, Practice, and Payment

Yahoo Finance  May 14, 2019

Earlier in April of this year, the National Law Review announced that the Florida State Legislature passed HB 23, a law cementing the validity of telehealth services in Florida and providing additional guidelines on the use of telehealth services. One beneficiary to this decision is eWellness Healthcare, the first physical therapy telehealth company offering insurance reimbursable real-time distance monitored treatments. The law further details new telehealth practice standards along with a registration process for out-of-state healthcare professionals delivering care to patients in Florida, which will become effective in January 2020.

Read the full article here.

M&A Transaction Activity

Select Recent M&A Transactions

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Private Placement Transaction Activity

Select Recent Private Placement Transactions2

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Care Delivery - Landscape

Inpatient & Clinical 

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

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Select HW TMT Transactions

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1. Capital IQ

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.