Healthcare Matters

Merger and acquisition activity in the health-care information technology (HIT) sector has increased by 28% to 196 deals in the first half of 2012 compared with the second half of 2011, according to a report by midmarket investment bank Berkery Noyes, with private equity and venture capital representing 27% of the deals, up 7 percentage points over the same period last year.

Notable private equity deals in the first half of 2012 include Veritas Capital’s $1.25 billion April acquisition of Thomson Reuters Corp.’s health-care business, which provides data, analytics and other services to the sector, and Lightyear Capital’s June purchase of Fidelity National Information Services Inc.’s health-care benefit business for $335 million. As we reported yesterday, Riordan Lewis & Haden Equity Partners agreed to sell maxIT Healthcare LLC, a health-care IT consulting company, to SAIC for $473 million.

Investors have figured out that health-care IT spending is tied to the new shared savings-based compensation models, so the vendors who address functions such as EHR/EMR implementation, revenue-cycle management, billing, and procurement of products and equipment are all red hot. Even niche medical-focused speech recognition and transcription technologies are getting a lot of attention. Last Thursday, iMedX announced the acquisition of Electronic Medical Transcription Services (eMTS), capping off several acquisitions in this sector. Again, most any technology associated with automating the digitization of medical records is sitting pretty.

—Tom Finn