10 Recent Healthcare Acquisitions In The Channel

Healthcare Is Hot

Some verticals are more profitable than others and healthcare is one that continues to make bank for solution providers.

Sunil Grover, executive vice president of the mid-market M&A advisory firm focused exclusively on the global IT industry martinwolf, said there are two waves of consolidation in healthcare making it one of the most profitable trends in the channel.

In a time of change with the implementation of the Affordable Care Act, along with new technologies emerging in the market place, partners report they're experiencing success by narrowing in on the space. Some are expanding their platforms through acquisitions with healthcare IT companies. Others are being picked up by large investment firms and consulting groups.

Grover noted there's strong opportunity for recurring revenue in healthcare, with about 30 million Americans previously uninsured coming into the space. Here are a few recent deals that highlight big business in health care.

Cognizant Acquires TriZetto

Solution provider Cognizant said last week it entered into an agreement to acquire healthcare company TriZetto for $2.7 billion in its largest acquisition to date.

Cognizant said rolling the company's 3,700 employees into its own 190,000 will lead to new synergies and developments.

Cognizant CEO Francisco D'Souza (pictured) said there is a potential for revenue of about $1.5 billion over the course of the first five years with Englewood, Colo.-based TriZetto, which helps health-care organizations to enhance administrative efficiencies and improve the cost, quality and delivery of care.

"Obamacare is here to stay," Grover said of the deal. "Healthcare IT by definition is a very active space for M&A because of the recurring revenue nature. … (Cognizant) would not make that big of an investment if they were not confident that this will grow."

Acentia Buys Business Computer Applications

Falls Church, V.A.-based Acentia acquired in February Atlanta-based Business Computer Applications.

Business Computer Applications provides IT services and solutions to the Centers for Disease Control and Prevention (CDC) and other health agencies.

"Acentia's strategic goals are simple -- providing innovative solutions to help the CDC and other health agencies meet their mission-critical public health and other priorities," said Acentia CEO Todd Stottlemyer in a statement at the time. "The acquisition of BCA supports these goals by providing us with a critical contract vehicle, CIMS, which allows us to compete for important full and open work with the CDC. Additionally, merging BCA's capabilities, relationships and domain expertise strengthens our technical capabilities and past performance with the CDC and our public sector health customers."

More than 30 employees from BCA joined Acentia's workforce of 1,100.

Perficient Buys BioPharm Systems

Perficient closed in April on its $17.6 million deal to acquire BioPharm Systems, an information technology consultant with $15 million in annual services revenue business that's focused on the life sciences industry.

Perficient's annualized revenue was pegged at $450 million around that time. The solutions provider, based in St. Louis, said the deal would expand its industry vertical expertise with the addition of a dedicated life sciences business, deepening Perficient's clinical trial management, clinical data management and safety and pharmacovigilance solutions.

Perficient's overall Oracle partnership and capabilities were strengthened in the transaction and added new clients, including Johnson & Johnson, Pfizer, St. Jude Medical and Bayer.

Vista Equity Partners Acquires Greenway Medical Technologies

Vista Equity Partners Fund IV completed a take-private of Greenway Medical Technologies in November 2013 and subsequently combined Greenway with Vitera, formerly Sage North America's Healthcare Division, which was acquired by Vista in 2011.

The deal amounted to just under $644 million.

The combined businesses serve about 13,000 medical organizations and 100,000 providers, according to a statement. Vista Equity, based in Carrollton, Ga., invests primarily in software companies and reported $6 billion in assets at the time.

Advanced Microelectronics Acquires Information Technology Architects

Advanced Microelectronics acquired Information Technology Architects, both of Indiana, in November.

Information Technology Architects, founded in 1996, has a concentration on healthcare and offers consulting and technical support services. They've implemented enterprise content management and financial data management solutions for government clients such as the U.S. Social Security Administration, NASA and the governments of Australia and New Zealand.

The deal was expected to provide expanded resources and operational scale to Information Technology Architects customers.

Huron Consulting Group Buys Vonlay

Chicago-based Huron Consulting Group said in April it plans to acquire Vonlay, a healthcare technology consulting firm specializing in clinical information systems and electronic health records (EHR) implementations and optimizations.

Vonlay was incorporated into the company's healthcare segments, which accounts for more than 50 percent of Huron's overall revenue. Vonlay was founded in 2011 and is based in Middleton, Wisconsin, and now acts as a subsidiary of Huron.

Vonlay's expertise in healthcare information technology (HIT), particularly Epic Systems software, expands Huron Healthcare's capabilities empowering hospitals, health systems and academic medical centers to improve their operations and care delivery, according to company representatives in a press release.

"The addition of Vonlay introduces a new set of capabilities for Huron Healthcare to deliver value to hospital, health system and physician group clients," said Huron CEO James H. Roth.

Quintiles Closes On Encore Health Resources

Quintiles completed its deal in July to buy Encore Health Resources, a provider of IT consulting and analytics services to the healthcare industry.

Quntiles provides biopharmaceutical development and commercial outsourcing services.

"The addition of Encore greatly enhances our electronic health records expertise -- an area that continues to grow in importance as payers, providers and biopharmaceutical customers increase their focus on real-world evidence," Quintiles President of Integrated Commercial Services and Solutions Scott Evangelista said in a statement at the time of the deal's closing. "We are excited about working together with the Encore team and leveraging the expertise each organization possesses to help our customers improve their probability of success."

The deal folds Encore into the Quintile Integrated Healthcare Services group.

VertiTech IT Acquires Health Technology Solutions

Holyoke, Mass.-based Vertitech IT in June acquired Health Technology Solutions, of Lancaster, Penn.

Health Technology Solutions President Terry Grogan was appointed VertiTech chief information officer.

Health Technology Solutions develops personalized, custom technology solutions and services for healthcare providers and academic institutions throughout the United States.

"Health Technology Solutions has been a valued VertitechIT partner for many years," Vertitech IT CEO Michael Feld said in a statement at the time. "As we continue to grow in the central and eastern Pennsylvania healthcare and business IT marketplace, it was only natural to make the company a formal part of our team and we're excited to have Terry help direct our presence in the region."

TractManager Buys MD Buyline

Chattanooga, Tenn. solution provider TractManager, which specializes in services and technology for healthcare organizations, acquired Dallas-based MD Buyline in August.

MD Buyline provides its clients, with a decision-making framework for balancing cost with revenue maximization and high-quality clinical outcomes. Its clients include half of the nation's hospitals, according to a press release.

TractManager is a provider of healthcare technology, systems and services, which include contract management, compliance and business intelligence solutions. The company works with more than 6,000 healthcare facilities and more than 130,000 users in the United States and international markets.

T-Systems International Acquires brightONE overseas

Munich-based AURELIUS Group sold the healthcare activity of its brightONE subsidiary to T-Systems International in January in a move company executives said helps further strengthen it as an integrated player in healthcare IT.

The healthcare business spun off from brightONE was number four in the German market, according to a company press release at the time of the deal. Its core business centers on hospital databases and mobile hospital information systems.

T-Systems is a global solutions providers headquartered in Frankfurt.