Increased Acquistion and Mergers Among Healthcare IT Vendors?

Although the recent acquisitions by Dell and Xerox were headline news, mergers and acquisition activities among healthcare IT companies was actually down compared with the two previous quarters according to Healthcare Growth Partners:

http://www.healthdatamanagement.com/news/acquisitions-39225-1.html?ET=healthdatamanagement:e1054:15369a:&st=email

According to the article, “Although challenges remain, Healthcare Growth Partners believes the health I.T. mergers and acquisition market likely bottomed out during the second and third quarters. Activity now should increase as vendors attempt to augment growth to meet investor expectations.”

So, Mark, care to guess what announcement we might see over the next 12 to 24 months?

Mike

One response to “Increased Acquistion and Mergers Among Healthcare IT Vendors?

  1. Mike knows how to get my attention. On of my favourite things to do is predict the market. Like all prognosticators, I sometimes get it right and sometimes not so much. Funny thing is that no one ever calls me and congratulations me when I’m right… 🙂

    CANADIAN Market Predictions

    Easy Prediction – I fully expect to see TELUS buy at least 2-3 more small players to get into different markets, or augment what they already do. I would also like to predict that water will continue to be wet in the next 12-24 months.

    Large Acute – The real challenge in predicting activity in Canada is the scale issue. Large US based multinationals dominate most of acute care, and are not likely going to buy other large companies just because of the small Canadian market. We may see consolidation amongst the HIT vendors, in 3-5 years as the market opportunities dwindle in the US market. This will have a spillover effect on their Canadian subsidiaries.

    Mid-Sized Canadian acute players – As health budgets continue to dry up (see the huge deficits in BC, AB and ON) there will be a major squeeze on acute care funding. I would not be surprised to see some of the mid-sized niche players sell themselves to the large multinationals. They will simply not be able to compete.

    Canadian EMR Vendors – some marginal players may go out of business, but I have a hard time seeing a mass consolidation in the next 1-2 years.

    US Predictions
    It all really comes down to who wins and who loses in the huge EHR stimulus funding bill in the US. I fully expect the smaller “winners” to get bought out in no less than 2 years from the giant multinationals. I would also not be surprised to see some of the larger brand name drug companies buying some HIT vendors. The drug market is more mature than IT, and the declining margins will force some moves. The other buyers for US Health IT companies are likely going to come from non-traditional vendors like Dell. The opportunity is just to great to jump into a “growing” market.

    Mark

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