The healthtech sector is currently one of the most dynamic in technology M&A.
The market is responding to the perfect storm of financial, regulatory, technological and social change that is delivering significant challenges to health systems worldwide.
Established healthcare providers struggle to respond to the reality of ageing populations, increasing patient demands, more expensive treatments, the rise of lifestyle diseases, data protection and security and immense pressure to reduce the cost of providing effective care while healthcare budgets spiral ever upwards.
We will continue to see high demand from acquirers and significant interest from private equity investors in companies that offer solutions to these challenges. Companies including Amazon, Apple, Google and IBM are targeting the healthcare sector and raising the stakes for incumbents who will undoubtedly respond with enhanced M&A activity.
Innovation in healthtech drives M&A activity
The healthtech sector continues to see high demand from acquirers as financial, regulatory, technological and social drivers deliver significant challenges to health systems worldwide.
Ageing populations, increasing patient demands and the rise of lifestyle diseases, coupled with pressure on the costs for delivering care are forcing healthcare providers to innovate to improve the quality of their services and lower their prices. The emergence of technologies now stands poised to power that innovation.
Various technologies, ranging from blockchain and artificial intelligence to big data analysis and advanced sensors, are being deployed to increase the effectiveness of healthcare services.
Meanwhile, data is fast becoming the common currency that lies at the heart of high-value business models such as the use of patient-empowerment tools, which enable individual patients to track, manage and improve their health together with their healthcare provider.
These developments have not only attracted private equity investors, but they have also prompted large technology companies including Amazon, Apple, Google and IBM to target the healthcare sector. Meanwhile, financial sponsors and technology giants alike continue to face strong competition for deals from incumbent healthtech providers, many of whom are under growing pressure to maintain their top-line organic growth and sharpen their market focus.
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