Nelson Advisors interviewed by Mergermarket: Electronic patient record asset owners mull exits as AI potential grows

Nelson Advisors
7 minutes ago
3 min read

Nelson Advisors partners Lloyd Price and Paul Hemings were interviewed by Mergermarket for their 'Electronic patient record asset owners mull exits as AI potential grows story.'

Source: https://mergermarket.ionanalytics.com/content/1004530343?source=news

Strategics and sponsors are considering exits from electronic patient record (EPR) holdings as artificial intelligence (AI) promises to disrupt the market.

In the UK, CVC Capital Partners appointed Arma Partners to find a buyer for System C, one of the country's leading NHS software providers, as reported. Meanwhile, UnitedHealth Group sold its subsidiary Optum UK, including the healthcare software firm EMIS, to TPG, according to UnitedHealth's earnings report.

Outside EMEA, sponsors TA Associates and GI Partners are looking to sell US software companyNetsmart Technologies for the second time in two years, as reported. And research by TD Cowen suggested that Oracle is considering offloading the EPR vendor Cerner, per multiple news outlets.

Exit attempts this year may reflect efforts to secure a good return amid a broad downturn in valuations in the Software as a Service (SaaS) space driven by increasing AI competition, known as the “SaaSpocalypse”, said Lloyd Price, partner and co-founder at Nelson Advisors.

In the long term, however, EPR providers are also likely to benefit from investor interest in AI because they hold high-quality patient data to feed models, data that is unavailable to competitors, Price said. The readiness to sell EPR assets right now could even be surprising, giventheir huge potential in AI, he added.

Another factor in the favour of EPR vendors is that multi-year deals with healthcare providers provide high revenue visibility for buyers, according to Price and Reece Donovan, CEO of EPR specialist Mayden. "It can take a long time to earn trust and build confidence with our customers, but once you have done this it tends to lead to successful, longer-term relationships," Donovan said.

"In terms of the capital available, this is certainly the right time to exit an asset like System C and similar assets," said a sector advisor, adding that there is an increasing number of fundraisings in the space. "We have tons of conversations with owners now."

Likely buyers in these cases include sponsors in Europe and North American strategics, the sectoradvisor said. Strategics, such as major EPR players or those in adjacent markets, may want to tap into the target's data or stop a rival from accessing it, Price said.

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