Mercom Capital Group, llc, a global clean energy communications and consulting firm recently released its report on Funding and Mergers and Acquisition (M&A) activity for the Healthcare IT (HIT) sector during the third quarter of 2012.
Venture Capital (VC) funding in HIT continued to be strong with USD 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.
In Q3 2012, Health Information Management (HIM) companies received the most funding as a technology group with USD 101 million in 20 deals, followed by Mobile Health companies with USD 39 million in seven deals and Social Health Network companies with USD 26 million in four deals.
Financial activity continues to be strong in the HIT sector with a healthy number of early-stage deals, explained Raj Prabhu, Managing Partner of Mercom Capital Group. Mobile health and social health network companies had a strong showing this quarter.
The top funding deal this quarter was the USD 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 USD 20 million raised by Connecture, an online health insurance process automation company focused on health insurance exchanges, followed by USD 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 USD 13 million, and finally Streamline Health Solutions, a provider of enterprise content management and business analytics solutions for healthcare organizations and SoloHealth, a healthcare technology and data analytics company raised USD 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 USD 3.2 billion, of which only ten 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 USD 1.4 billion. One Equity Partners acquired M*Modal, a provider of clinical documentation services and speech understanding solutions, for USD 1.1 billion, Science Applications International Corporation acquired maxIT Healthcare, a healthcare IT consulting firm, for USD 473 million. Thomas Bravo acquired Mediware Information Systems, a provider of clinical software solutions, for USD 195 million.