Interesting News in Healthcare Q1 2020

 

Healthcare Newsletter
Q1 2020

Deals, Investments                                                                                                                                    

There were 500 deals representing a total reported transaction value of $90.5 billion during the first quarter of 2020, within the market for healthcare and healthcare service businesses that support the life sciences industry. This compares to 617 deals with a reported value of $140.7 billion during Q1 of 2019, a decline in 18.9% in number of deals and a 35% decline in overall transaction value. 

While that quarter-to-quarter decline is noteworthy, indications are that the coronavirus pandemic may have just started to affect this sector during Q1: the total number of deals was about the same from February 2020 – 147 deals – to March – 148 deals. And the total transaction value rose from $11.7 billion in February 2020 to $31.1 billion in March 2020.

The largest deal of the quarter was health insurer WellCare’s $17 billion completed merger. Other deals of interest in the sector include Huntsworth’s decision to go private by selling to PE firm Clayton, Dubilier & Rice for $511 million, W20’s announced fourth acquisition of NYC-based agency 21 grams, and WebMD’s purchase of Staywell from Merck.

 

After WellCare merger, Centene now a ‘$100 billion-plus’ company

The size of the deal was previously reported to be $17 billion. The combined entity will serve more than 24 million members, with both Centene and WellCare having a large hold in the government health space.

  • For 2019, Centene reported revenues of $74.64 billion, up 24 percent from the prior year.
  • Centene saw its total membership increase from 14.17 million to 15.24 million last year. That included a 20 percent increase in the number of people who enrolled in its ACA plans to 1.81 million.
  • It also saw a more modest increase in its Medicaid membership, from 8.39 million to 8.64 million.
CompanyPrice ($mm)Revenue ($mm)EBITDA ($mm)Price/RevPrice /EBITDA
WellCare17,00027,0001,2120.6x14.0x

Modern Healthcare, MedCity News


W2O acquires healthcare advertising boutique 21Grams

W2O Group is adding an advertising agency to its portfolio with its acquisition of 21Grams — a New York-based agency focused on healthcare.

  • The deal will be W2O’s fourth acquisition in the past six months and its first pure-play advertising and creative buy.
  • 21Grams is a 150-person shop with more than $50 million in revenue.
  • The agency was founded in 2016 and has seen double-digit growth every year since then, according to its founder/CEO Bob Blink. Terms of the transaction were not disclosed.

The Holmes Report

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