Healthcare IT (HCIT): Strategic consolidation drives sector M&A as AI and ML solutions are increasingly sought

Our latest HCIT sector report highlights dynamics and developments, as well as M&A trends in the HCIT industry

> Download the full report here 

For busy readers in a nutshell:

Strategic M&A continues to drive M&A in the HCIT environment

• Overall deal volume remains stable, hovering around early pandemic levels after residing from highest volumes observed between Q1 2021 and Q2 2022
• Strategic M&A has led the HCIT transaction landscape as private equity represented a 4-year median of 37% of total deal volume and 33% of total disclosed deal value
• Clients of HCIT providers are looking to streamline vendor relationships. Larger strategics are seeking to expand product suites to adapt to client demands, targeting innovative AI, ML, and cloud HCIT solutions across the market

Current pressures on the HCIT sector will reside in the NTM

• Cost inflation may turn to cost optimization in the NTM, more than doubling the median HCIT EBITDA margin and causing EBITDA multiples to reside accordingly
• Emergence from inflationary and interest rate pressures may bring investors, with significant available capital, back to the table in the middle market
• Election year pressures, which historically cause the HCIT sector to underperform, will lift over the NTM as healthcare policies become known