August proved to be another busy month for eHealth transactions. According to our Deal Search Online database, there were 18 acquisitions in the eHealth sector in July 2019, and 17 in August. The most popular targets this month were cloud-based and data-analytics providers.
There were eight digital health transactions with that focus, including Water Street Healthcare Partners and JLL Partners’ acquisition of THREAD, a virtual research platform used by biopharma, contract research organizations, not-for-profit researchers and life science organizations to capture global clinical study data for clinical studies. Water Street and JLL will invest to further develop and expand THREAD’s offering on a global scale.
Private equity also played a role in the largest digital health deal in August. Parthenon Capital Partners, along with an investment from Bain Capital, merged two of its digital health companies, Zelis Healthcare and RedCard Systems. The new company has an enterprise value of approximately $5.7 billion, according to sources cited by Buyouts.com. Zelis provides end-to-end healthcare claims cost management and payments solutions to providers and consumers in the medical, dental and workers’ compensation markets. RedCard offers a secure communication platform for healthcare payers, providers and consumers to exchange claims, payments, benefits and individual financial information between parties. The new company creates a platform with end-to-end capability, encompassing claim cost management and payments solutions and will have a client base over 700 clients, including the nation’s top health plans, and 600,000+ providers.
Another eHealth deal worth highlighting is the merger of Signify Health and Remedy Partners, two portfolio companies of New Mountain Capital. Signify Health is a home health organization, while Remedy’s bundled payment network serves Medicare and private insurers, and manages more than $9 billion of annual health spending. The new group will focus on providing value-based care solutions using clinical, behavioral, and social data to over 300 provider systems and 2,000 post-acute organizations. Its combined revenue will reach roughly $600 million. New Mountain Capital acquired Remedy Partners in December 2018 and formed Signify Health by merging CenseoHealth and Advance Health through a recapitalization process in December 2017.