Sectorwatch:Healthcare ITQ3 2019
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Healthcare ITQ3 2019
Sector Dashboard [4]
Public Basket Performance [5]
Operational Metrics [7]
Valuation Comparison [10]
Recent Deals [12]
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Overview
7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions, and provide market assessments and benchmarking. As a close knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. We publish our sectorwatch, a review of M&A and operational trends in the industries we focus.
Dashboard• Summary metrics on the sector• Commentary on market momentum by
comparing the most recent 12-month performance against the last 3-year averages.
Public Basket Performance• Summary valuation and operating metrics
for a basket of comparable public companies
Valuation Comparison• Graphical, detailed comparison of valuation
multiples for the public basket
Recent Deals• The most recently announced deals in the
sector
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Dashboard
Operating Metrics
Valuation
Revenue Growth
-2.9% One year revenue growth percentage compared to
revenue growth average percentage for last 3 years.
Pricing / Gross Margin
-0.1% One year gross profit percentage compared to gross
profit percentage average for last 3 years.
Profitability
-2.1% One year EBITDA percentage compared to EBITDA
percentage average for last 3 years.
Current revenue growth rate is less than the average of the last 3 years,
indicating that the market may be flattening, but the average growth rate is still
19%.
Current gross profit margin is less than the average of the last 3 years gross
profit margins by this amount.
Current EBITDA margin is a bit less than the average of the last 3 years EBITDA
margins, which may signal pricing pressure and further consolidation.
13.3%
14.5%
56.5%
0% 20% 40% 60%
Median LTM EBITDA Margin %
Median LTM Revenue Growth %
Median LTM Gross Profit Margin %
4.9x
30.9x
38.1x
58.5x
0x 20x 40x 60x 80x
Median TEV / LTM Revenue
Median TEV / LTM EBITDA
Median TEV / LTM EBIT
Median Price / LTM Earnings
5
Public BasketCompany TEV $m
LTM Rev
$m
Rev
Growth
YoY GP %
EBITDA
%
TEV /
Rev X
TEV /
EBITDA
X # FTEs
Rev /
FTE $k
Cerner Corporation 23,444 5,527 5% 82% 22% 4.2 19.5 29,200 189
Veeva Systems Inc. 23,389 911 25% 73% 29% 25.7 87.9 2,553 357
M3, Inc. 11,831 1,085 18% 57% 27% 11.0 41.3 6,024 180
Medidata Solutions, Inc. 5,478 685 17% 74% 10% 8.0 76.5 1,998 343
HealthEquity, Inc. 5,357 304 25% 64% 34% 17.6 51.9 1,141 267
Teladoc Health, Inc. 4,753 457 63% 68% -6% 10.4 0.0 2,242 204
CompuGroup Medical Societas Europaea 4,169 838 20% 41% 24% 5.0 21.1 4,955 169
Winning Health Technology Group Co., Ltd. 3,198 221 19% 52% 22% 14.9 68.5 4,241 52
Inovalon Holdings, Inc. 3,190 580 34% 74% 27% 5.5 20.6 2,104 276
HMS Holdings Corp. 2,994 605 10% 38% 23% 5.0 21.9 2,500 242
Omnicell, Inc. 2,957 836 10% 48% 13% 3.5 27.4 2,480 337
Allscripts Healthcare Solutions, Inc. 2,517 1,748 15% 47% 5% 1.4 31.7 9,500 184
Pro Medicus Limited 2,166 32 41% 97% 54% 68.6 127.4 - NA
Tabula Rasa HealthCare, Inc. 1,335 221 48% 33% 6% 6.0 106.5 952 232
Agfa-Gevaert NV 1,011 2,510 -7% 32% 5% 0.4 7.6 9,662 260
Benefitfocus, Inc. 983 265 10% 51% -9% 3.7 0.0 1,450 183
Pharmagest Interactive SA 925 170 15% 32% 28% 5.6 20.2 1,012 168
Vocera Communications, Inc. 774 177 4% 62% -3% 4.4 0.0 630 281
HealthStream, Inc. 752 249 12% 58% 13% 3.0 24.1 757 329
Evolent Health, Inc. 692 685 46% 32% -5% 1.0 0.0 3,800 180
Simulations Plus, Inc. 673 33 12% 73% 37% 20.6 56.0 93 351
NNIT A/S 483 460 8% 17% 18% 1.1 6.0 3,214 143
Computer Programs and Systems, Inc. 479 279 -2% 53% 12% 1.7 14.8 2,000 139
Castlight Health, Inc. 364 155 10% 62% -19% 2.3 0.0 470 331
NantHealth, Inc. 263 91 1% 57% -41% 2.9 0.0 543 167
Average 4,167 765 18% 55% 13% 9.3 43.7 3,897 232
Median 2,166 457 15% 57% 13% 5.0 27.4 2,173 218
share price as of 25Jul19
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Public Basket Valuation Trends
Public EBITDA Multiples over Time
Public Revenue Multiples over Time
0x
2x
4x
6x
8x
TEV/Revenue - Median TEV/Revenue - Average
0x
10x
20x
30x
40x
TEV/EBITDA - Median TEV/EBITDA - Average25.9x
4.9x
0x
5x
10x
15x
20x
25x
30x
35x
40x
TEV/EBITDA - Median TEV/Revenue - Median
TEV/EBITDA - Average TEV/Revenue - Average
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Operational Metrics
LTM Revenue Growth %LTM Revenue per
Full Time Employee x 000’s
$- $100 $200 $300 $400
Median
Winning Health Technology…
Computer Programs and…
NNIT A/S
NantHealth, Inc.
Pharmagest Interactive SA
CompuGroup Medical…
M3, Inc.
Evolent Health, Inc.
Benefitfocus, Inc.
Allscripts Healthcare…
Cerner Corporation
Teladoc Health, Inc.
Tabula Rasa HealthCare, Inc.
HMS Holdings Corp.
Agfa-Gevaert NV
HealthEquity, Inc.
Inovalon Holdings, Inc.
Vocera Communications, Inc.
HealthStream, Inc.
Castlight Health, Inc.
Omnicell, Inc.
Medidata Solutions, Inc.
Simulations Plus, Inc.
Veeva Systems Inc.
-10% 10% 30% 50% 70%
Median
Agfa-Gevaert NV
Computer Programs and…
NantHealth, Inc.
Vocera Communications, Inc.
Cerner Corporation
NNIT A/S
Benefitfocus, Inc.
HMS Holdings Corp.
Omnicell, Inc.
Castlight Health, Inc.
Simulations Plus, Inc.
HealthStream, Inc.
Pharmagest Interactive SA
Allscripts Healthcare…
Medidata Solutions, Inc.
M3, Inc.
Winning Health Technology…
CompuGroup Medical…
HealthEquity, Inc.
Inovalon Holdings, Inc.
Pro Medicus Limited
Evolent Health, Inc.
Tabula Rasa HealthCare, Inc.
Teladoc Health, Inc.
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Operational Metrics
LTM Gross Profit Margin % LTM EBITDA %
-60% -30% 0% 30% 60%
Median
NantHealth, Inc.
Castlight Health, Inc.
Castlight Health, Inc.
Benefitfocus, Inc.
Teladoc Health, Inc.
Evolent Health, Inc.
Vocera Communications, Inc.
Allscripts Healthcare…
Agfa-Gevaert NV
Tabula Rasa HealthCare, Inc.
Medidata Solutions, Inc.
Computer Programs and…
HealthStream, Inc.
Omnicell, Inc.
NNIT A/S
Winning Health Technology…
Cerner Corporation
HMS Holdings Corp.
CompuGroup Medical…
M3, Inc.
Inovalon Holdings, Inc.
Pharmagest Interactive SA
Veeva Systems Inc.
HealthEquity, Inc.
Pro Medicus Limited
0% 20% 40% 60% 80% 100%
Median
NNIT A/S
Pharmagest Interactive SA
Agfa-Gevaert NV
Evolent Health, Inc.
Tabula Rasa HealthCare, Inc.
HMS Holdings Corp.
CompuGroup Medical…
Allscripts Healthcare…
Omnicell, Inc.
Benefitfocus, Inc.
Winning Health Technology…
Computer Programs and…
NantHealth, Inc.
M3, Inc.
HealthStream, Inc.
Vocera Communications, Inc.
Castlight Health, Inc.
HealthEquity, Inc.
Teladoc Health, Inc.
Veeva Systems Inc.
Simulations Plus, Inc.
Medidata Solutions, Inc.
Inovalon Holdings, Inc.
Cerner Corporation
Pro Medicus Limited
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Valuation
TEV / LTM Revenue TEV / LTM EBITDA
0x 20x 40x 60x 80x
Median
Agfa-Gevaert NV
Evolent Health, Inc.
NNIT A/S
Allscripts Healthcare…
Computer Programs…
Castlight Health, Inc.
NantHealth, Inc.
HealthStream, Inc.
Omnicell, Inc.
Benefitfocus, Inc.
Cerner Corporation
Vocera…
HMS Holdings Corp.
CompuGroup…
Inovalon Holdings,…
Pharmagest…
Tabula Rasa…
Medidata Solutions,…
Teladoc Health, Inc.
M3, Inc.
Winning Health…
HealthEquity, Inc.
Simulations Plus, Inc.
Veeva Systems Inc.
Pro Medicus Limited
0x 30x 60x 90x 120x 150x
Median
Agfa-Gevaert NV
Computer Programs…
Cerner Corporation
Pharmagest…
Inovalon Holdings,…
CompuGroup Medical…
HMS Holdings Corp.
HealthStream, Inc.
Omnicell, Inc.
Allscripts Healthcare…
M3, Inc.
HealthEquity, Inc.
Simulations Plus, Inc.
Winning Health…
Medidata Solutions,…
Veeva Systems Inc.
Tabula Rasa…
Pro Medicus Limited
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Valuation
Price / LTM Earnings Historical Valuation Multiples versus Revenue Growth Rate
0x 30x 60x 90x 120x 150x 180x
Median
NNIT A/S
Computer Programs
and Systems, Inc.
Pharmagest
Interactive SA
CompuGroup Medical
Societas Europaea
Cerner Corporation
HMS Holdings Corp.
Allscripts Healthcare
Solutions, Inc.
HealthEquity, Inc.
Omnicell, Inc.
M3, Inc.
HealthStream, Inc.
Winning Health
Technology Group…
Simulations Plus, Inc.
Veeva Systems Inc.
Medidata Solutions,
Inc.
Pro Medicus Limited
-10%
0%
10%
20%
30%
40%
50%
60%
0x
20x
40x
60x
80x
100x
120x
140x
LTM
RG
R%
EBIT
DA(x
)
EBITDA(x) LTM RGR%
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RECENT TRANSACTIONS SUMMARY
In the last twelve months there were transactions totaling $28.3b transactions in the healthcare IT sector. 7 Mile Advisors tracked 1,205 transactions in the sector, including 294 M&A transactions.
All Transactions by RegionAll Transactions by Type M&A Transaction Ranges by Value
Merger & Acquisition Statistics
Valuation Summary
Total Deal Value($mm): $24,406.79
Average Deal Value: $2770.35
Average TEV/Revenue: 4.17 x
Average TEV/EBITDA: 33.29x
Average Day Prior Premium(%): (7.33)%
Average Week Prior Premium(%): (7.43)%
Average Month Prior Premium(%): (12.69)%
Most Active Buyers/Investors by Number of Transactions Most Active Buyers/Investors by Total Transaction Size
Company NameNumber Of Transactions Company Name
Total Transaction Size ($mm)
Koninklijke Philips N.V. (ENXTAM:PHIA) 4 Dassault Systemes Americas Corp. 6,028.46
Tabula Rasa HealthCare, Inc. (NasdaqGM:TRHC) 3 Veritas Capital Fund Management, LLC 5,941.9
Waystar, Inc 3 Evergreen Coast Capital Corp. 5,941.9
WELL Health Technologies Corp. (TSXV:WELL) 3 Ethicon US, LLC 5,750.0
WellSky Corporation 3 3M Company (NYSE:MMM) 1,000.0
Anju Software, Inc. 2 ResMed Operations Inc. 750.0
CompuGroup Medical Societas Europaea (DB:COP) 2 Global Payments Inc. (NYSE:GPN) 700.0
DAYLI BlockChain Co.,LTD. (KOSDAQ:A139050) 2 AlpInvest Partners B.V. 566.61
Definitive Healthcare, LLC 2 TA Associates Management, L.P. 566.61
Doctors' Administrative Solutions, LLC 2 GI GP IV LLC 566.61
Private
Placement0%
Merger/Acquisition
100%
Europe
20%
Asia /
Pacific13%
Africa /
Middle East3%
United
States and Canada
64%
Latin America and
Caribbean0%
Greater than $1
billion1%
$500 -
$999.9mm
1%$100 -
$499.9mm3%
Less than
$100mm24%
Undisclose
d71%
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Recent TransactionsDate Target Buyer / Investor
Total Transaction
Value Target
Revenue TEV /
Revenue TEV /
EBITDA
29Jul19 Waystar, Inc EQT Partners AB; Canada Pension Plan Investment Board; EQT VIII
- - - -
15Jul19 OmniComm Systems, Inc. Anju Software, Inc. 78.79 24.62 3.1x 43.0x
25Jun19 Corepoint Health, LLC Rhapsody - - - -
26Jun19 Sansoro Health, Inc. Datica Health, Inc. - - - -
19Jun19 PatientsLikeMe, Inc. UnitedHealth Group Incorporated - - - -
19Jun19 Nextech Systems, LLC Thomas H. Lee Partners, L.P. - - - -
18Apr19 HemaTerra Technologies, LLC The Riverside Company - - - -
11Jan19 DataCeutics, Inc. NAVITAS LIFE SCIENCES LIMITED 45.00 - - -
10Jan19 Providigm, LLC HealthStream, Inc. 22.15 - - -
1Nov18 MYnd Analytics, Inc. MYnd Analytics, Inc. (nka:Emmaus Life Sciences, Inc.)
- 1.58 - -
2Jan19 JC Griffin LLC DHG Healthcare - - - -
2Jan19 HealthLine Solutions, Inc. Medsphere Systems Corporation - - - -
17Dec18 Cloud Practice Inc. Premier Health Group Inc. 3.74 - - -
14Dec18 Consolo Services Group, LLC WellSky Corporation - - - -
7Dec18 Netsmart LLC. AlpInvest Partners B.V.; TA Associates Management, L.P.; TA XII-B, L.P.; TA XII-A, L.P.; Bay Opportunities LP; TA Investors XII, L.P.; Pacific Opportunity LP; Pacific Opportunity II LP; ACP Accelerate I LLC; ACP Accelerate II LLC; GI GP IV LLC
566.61 - - -
31May18 Advanced Health Media, LLC IQVIA Holdings Inc. - - - -
3Dec18 Reciprocal Labs Corporation ResMed Inc. 225.00 - - -
5Nov18 MatrixCare, Inc. ResMed Operations Inc. 750.00 - - -
23Oct18 Vendor Credentialing Service LLC Clearlake Capital Group, L.P. - - - -
23Oct18 Global Healthcare Alliance, Inc. Cedar Gate Technologies, LLC - - - -
18Sep18 Novellusdx Ltd. Cancer Genetics, Inc. - - - -
14Sep18 Circulation, Inc. LogistiCare Solutions, LLC 45.12 - - -
17Sep18 Connance, Inc. Waystar, Inc - - - -
16Sep18 Lucro Solutions, Inc. Valify, Inc. - - - -
14Sep18 DIMEC Limited Co-op Ventures - - - -
13Sep18 MD International AB Apotek Hjärtat AB 35.97 - - -
5Sep18 Nemaris, Inc. Globus Medical, Inc. 25.20 - - -
13Sep18 Pirana Software & Consulting BV Certara, L.P. - - - -
12Sep18 Wellpass Welltok, Inc. - - - -
11Sep18 Apex Revenue Technologies, LLC RevSpring, Inc. 200.00 - - -
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7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and
private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser
focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets.
Securities offered through 7M Securities LLC.
Leroy Davis, Partner 704.899.5962 [email protected]
Tripp Davis, Partner 704.899.5762 [email protected]
Andy Johnston, Partner 704.899.5961 [email protected]
Ben Lunka, Managing Director 704.496.2995 [email protected]
Jeff Stoecklein, Managing Director 312.796.9330 [email protected]
Mark Landry, Managing Director 561.972.0609 [email protected]
Kristina Sergueeva, Director 704.899.5149 [email protected]
Neil Churman, Director 281.742.9340 [email protected]
John Cooper, Director 704.973.3996 [email protected]
Tim Frye, Director 704.973.3994 [email protected]
Ben Garber, Vice President 412.626.7898 [email protected]
Nicholas Prendergast, Financial Analyst 704.973.3995 [email protected]
Ariail Siggins, Marketing Director 704.981.2908 [email protected]
Emily Halstenberg, Marketing & Sales Coordinator 704.409.9912 [email protected]
Sydney Larese, Associate 704.973.3998 [email protected]
Marty Johnson, Associate 704.973.3999 [email protected]
Rory Julyan, Associate 704.981.2520 [email protected]
Garth Martin, Associate 704.973.3997 [email protected]
Dennis Fox, Associate 704.706.9168 [email protected]
Steve Buffington, Associate 704.960.1828 [email protected]
Brynne Miller, Associate 704.960-1701 [email protected]
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