The value of merger and acquisitions (M&A) in healthcare IT sector globally grew by 17 per cent to USD 7 billion in 2012, driven by acquisition of US-based Decision Resources Group by Piramal Healthcare.
Indian drug firm Piramal Healthcare's acquisition of US-based Decision Resources, a healthcare information company which provides web-enabled research, for USD 635 million was the fourth largest M&A transaction of 2012, according to a report by consulting firm Mercom Capital Group.
M&A deals in healthcare IT sector have been picking up in the last three years, the report said. There were as many as 163 M&A transactions worth USD 7 billion in 2012, while in the previous year, there were 85 deals worth USD 6 billion.
In 2010, M&A activity in the healthcare IT sector saw 85 transactions totalling USD 4 billion.
"M&A activity in the healthcare IT sector was robust with 163 transactions totalling approximately USD 7 billion in 2012," the report noted.
The top 5 M&A transactions included USD 1.4 billion acquisition of Sunquest Information Systems by Roper Industries, followed by Thomson Reuters' HIT business acquired by Veritas Capital for USD 1.25 billion, One Equity Partners' USD 1.1 billion purchase of MModal and Decision Resource- Piramal Healthcare deal worth USD 635 million.
Besides, USD 473 million acquisition of maxIT Healthcare by Science Applications International Corp was the fifth largest deal.
The report said that McKesson was the most active acquirer with four transactions. Besides, there were 14 other companies with two acquisitions each and 13 private equity firms also made acquisitions in 2012.
Also, the report noted that global venture capital (VC) funding in the healthcare IT sector totalled nearly USD 1.2 billion in 163 deals in 2012 compared to USD 480 million in 49 deals in the preceding year.
"While the focus of funding has been in the Health Information Management category, which covers technologies on the Healthcare Practice side, there is significant investment and funding going into companies that engage the consumers like mobile health, telehealth, personal health and social health," Mercom Capital Group Managing Partner Raj Prabhu said.
"The HIT sector really took off in 2012; the deal count tripled and number of investments doubled compared to 2011," he added.