2016 Global Digital Health M&A Review: 40 Deals Highlighted by $544M Imprivata Acquisition

As 2016 draws to a close, a review of the year reveals that, much like last year, it has been another significant year for M&A activity in the digital health sector: the total number of acquisitions reached 40 in 2016, surpassing the 36 recorded in 2015. This figure includes many high-profile and notable companies such as Google, Fitbit, and Philips. VCBeat (WeChat ID: vcbeat) has compiled a summary of M&A activities from foreign media sources to provide you with a detailed overview of this year’s industry consolidation trends.

According to data observed by MobiHealthNews,There were 16 acquisitions in the first two quarters of 2016. M&A activity remained robust in the third quarter, with 15 acquisitions and one merger; an additional eight acquisitions were completed in the fourth quarter.. The 14 disclosed transactions will be presented below in descending order of transaction amount, while the 26 undisclosed transactions will be introduced in chronological order.

In July this year, Imprivata, a developer of medical IT security tools headquartered in Lexington, Massachusetts, agreed to be acquired by Thoma Bravo, a private equity firm based in San Francisco, becoming its subsidiary. The transaction is valued at approximately $544 million, making it the largest acquisition deal of the year. According to the terms of the agreement, shareholders on record will receive $19.25 in cash for each share of Imprivata common stock, representing a 33% premium over the final closing price of $14.50 per share.

Both companies are high-tech service providers focused on value-based healthcare. The acquisition was completed in October, with a transaction amount of $219.4 million. Shortly before the deal closed, Valence Health signed a major contract with MDWise, an Indiana Medicaid provider serving 400,000 members. During an investor call, Frank Williams, CEO of Evolent Health, stated that the acquisition would add 1 million users from 10 of Evolent Health’s 12 partners.

The former is the owner of UpToDate and Lexicomp, mobile products designed for physicians, while the latter is a company specializing in the research and development of patient engagement software. The transaction, valued at $170 million, was completed in October. This acquisition is noteworthy as it marks Wolters Kluwer’s first deal centered on patient engagement. The company’s previous mergers and acquisitions have typically revolved around physician-centric tools, such as UpToDate and Lexicomp, as well as medication information applications like Medi-Span.

The transaction was completed in April, with a deal value of nearly $117 million. Whistle, a San Francisco-based pet fitness tracking company, has developed a smart collar that allows owners to track their dogs’ location and activity. Pet activity data can be transmitted from the collar to a companion app, helping users pinpoint their dog’s location and view historical records of the dog’s activity and sleep patterns. Mars Petcare is a renowned pet food manufacturer whose brands include Iams, Pedigree, and Whiskas. Its parent company is Mars, Incorporated, a famous confectionery maker with a portfolio of 29 candy brands, including M&M’s, Dove, Snickers, and Twix.

The transaction was completed in September, with a deal value of $106 million (€98.33 million). iHealth Labs is a subsidiary of Andon Health, a Chinese medical device company, specializing in connected devices; it maintains offices in Paris, France, and Mountain View, California, among other locations. eDevice is an established European enterprise headquartered in Bordeaux, France, providing backend infrastructure for connected remote monitoring devices to hospitals and healthcare institutions. iHealth was one of the earliest companies to enter the field of smartphone-connected medical devices. Its product portfolio includes various smart scales, activity trackers, blood pressure monitors, and blood glucose meters, which are sold in the United States, Europe, and China.

Recently, the company has transitioned from primarily producing direct-to-consumer products to focusing on B2B offerings. iHealth Connect, unveiled at this year’s Healthcare Information and Management Systems Society (HIMSS) conference, is an enterprise-grade health management system. Within this ecosystem, the iHealth Gateway serves as a secure data hub that aggregates data from various iHealth home devices, as well as from diabetes management, ambulatory care, and population health software systems. The acquisition of eDevice signals iHealth’s further expansion into the enterprise device sector: eDevice’s technology will enable iHealth to transmit data from its diverse devices to healthcare institutions.

The transaction was completed in February this year, with a deal value of $85 million. Headquartered in Boston, FitnessKeeper owns the fitness app Runkeeper and has raised approximately $11.5 million since its inception. Asics is a Japanese apparel company. Asics’ acquisition of Runkeeper was driven by two factors: first, the potential for one-to-one marketing development; and second, the app platform itself, which Asics does not intend to alter post-acquisition. Jason Jacobs, CEO of FitnessKeeper, also assured that end users would experience no significant changes following the acquisition.

In April, Logitech acquired wireless headphone company Jaybird for $50 million in cash. In addition to its line of sports-oriented wireless headphones, Jaybird also produced a wrist-worn activity tracker called Reign, but this product line was not the focus of the acquisition.

In early December, the global wearables industry witnessed a shocking acquisition: Fitbit acquired Pebble’s assets, including its software intellectual property and personnel. Although the transaction price has not been officially disclosed, numerous financial reports citing insider sources indicate that the acquisition amount should be between $34 million and $40 million. This acquisition means that Pebble devices will no longer receive updates, but Fitbit will continue to support existing Pebble devices for at least a certain period of time.

Both companies were early pioneers in the mobile health sector. BioTelemetry, formerly known as CardioNet, and TelCare, the first diabetes management technology company to produce a cellular-connected glucose meter approved by the FDA, completed the acquisition in December. BioTelemetry paid $7 million in cash and will make additional performance-based earn-out payments of up to $5 million, also in cash.

In July this year, Nashville-based employee health company Healthways agreed to sell its population health business to Atlanta-based Sharecare, marking Sharecare’s largest acquisition to date. Sharecare will issue $30 million in common stock to Healthways in exchange for the population health business, which includes 1,700 employees. Post-acquisition, annual revenue is projected to reach $259 million. Healthways will also pay Sharecare $25 million to cover anticipated negative cash flows. If losses exceed $25 million, Sharecare may reduce the equity consideration to $10 million.

In February this year, One Medical Group, a provider of digital primary care services, acquired Rise, a developer of nutrition coaching apps, for $20 million. Founded in 2013, Rise has emerged as a rising star in the nutrition coaching app sector, having raised a total of $3.3 million in funding. Its advisory board boasts an impressive lineup of experts, including Harvard University PhD Russ Phillips, CNN’s chief medical correspondent Sanjay Gupta (who is also the brother of Suneel Gupta, co-founder of Rise Labs), P90X creator Tony Horton, OkCupid co-founder Sam Yagan, and Facebook’s Vice President of User Growth, Alex Schultz.

Rise provides users with a comprehensive nutritional guidance system that helps them lose weight and adopt a healthier lifestyle. The platform requires users to upload photos of every meal, allowing coaches (nutrition experts) to monitor their dietary habits and offer personalized advice based on this information. Coaches also provide daily health feedback and tips. In traditional settings, one-on-one nutritional coaching typically costs over $300 per month; however, through Rise, the cost can be as low as approximately $60 per month.

The acquisition, an all-cash transaction valued at $20 million, was completed in September. HMS Holdings Corp., which owns multiple subsidiaries, provides software tools to insurance payers and other clients. Essette is a web-based management platform that offers population health management and patient engagement solutions to insurance payers and providers. Essette collaborates with various risk-bearing provider organizations, including managed care organizations and healthcare service providers. Its software helps coordinate care teams, enables enterprises to manage multiple data repositories, and improves communication between physicians and patients.

MeYou Health is the Boston-based innovation and digital health subsidiary of Healthways. The transaction was completed in July of this year, with acquirer Rick Lee—a serial entrepreneur who previously sold the early-stage digital health platform Healthrageous to Humana in 2013—leading a group of investors, including Ballast Point Ventures, Blue Shield of California, and several prominent individual investors, to acquire MeYou Health for $11 million. Rick Lee will serve as CEO of the newly independent MeYou Health.

Headquartered in El Segundo, California, Mattel is the world’s largest toy company and a leader in the design, manufacturing, and sales of children’s products. Sproutling, based in San Francisco, California, specializes in developing wearable health-monitoring devices for infants. Since its inception, the company has raised at least $6.5 million in funding, with its most recent round disclosed last year to the U.S. Securities and Exchange Commission. Sproutling’s investors include First Round Capital, Forerunner Ventures, FirstMark Capital, Accelerator Ventures, Lemnos Labs, BoxGroup, and Shawn Fanning, co-founder of Napster, among others. The company will continue to sell products under the Sproutling brand, while its team will also collaborate with Mattel to design and develop new products under the Mattel brand.

Below are 26 M&A deals with undisclosed transaction amounts.

1. Greyhealth Group (GHG) Acquires Lathe.The transaction was completed in February. GHG is a healthcare agency under the WPP Group, a co-founder of Text4Baby, and an early partner of IBM Watson. Founded in 2003, Lathe is a medical app design and development company that has collaborated with numerous healthcare companies to develop apps and mobile websites. Lathe’s key selling point is its profound understanding of pharmaceutical marketing regulations. Its product portfolio includes apps for chronic disease management, episodic therapy, medical devices, and over-the-counter (OTC) medications. Its flagship products include an app for patients with multiple sclerosis, an iPad application for treating asthma and allergy patients, and a website built for Valeant Pharmaceuticals targeting parents of children with eczema.

2. Virgin Pulse Acquires ShapeUp and Global Corporate Challenge (GCC).Virgin Pulse, an employee health and engagement company headquartered in Framingham, Massachusetts, has acquired two employee health firms: ShapeUp, based in Providence, Rhode Island, and GCC, based in Australia. ShapeUp develops corporate social wellness programs that promote physical fitness through team-based training challenges. The company has been in operation for approximately ten years and has raised over $15.5 million in funding. Additionally, ShapeUp’s platform can track team progress, encourage healthy lifestyle habits, provide nutritional and exercise-related health coaching, and extract data from various fitness equipment. GCC has been operating for 11 years. Like ShapeUp, it focuses on the employee health sector but on a larger scale: its programs currently cover nearly 2 million employees across 4,700 companies in 185 countries.

3. Huron Consulting Group Acquires MyRounding.Huron Consulting Group, a Chicago-based global consulting firm with a strong focus on healthcare services, has also acquired the mobile health software company MyRounding for an undisclosed sum. HCG plans to integrate MyRounding into its healthcare practice and offer its software to hospital clients. Founded in 2012 and headquartered in Denver, Colorado, MyRounding offers an iPad/web application designed for physicians, nurses, and other hospital professionals responsible for patient rounds. By using tablets to conduct rounds and collect patient feedback, hospitals can continuously monitor patients and respond more promptly to their needs and requests. The cloud-based platform can also sync data directly into hospitals’ electronic health records (EHRs).

4. HealthTap Acquires Docphin.In March, health technology company HealthTap secretly acquired Docphin, a company dedicated to simplifying the process for physicians to find and read medical literature, for an undisclosed amount. In 2012, Docphin was a member of Rock Health’s second accelerator cohort and later that year became part of StartUp Health’s second cohort of startups. Founded in 2010, although the company never publicly announced any financing activities, it appears to have raised approximately $1.6 million at its inception.

5. Scrypt Acquires DocbookMD.Also in March, document management company Scrypt acquired the physician communication platform DocbookMD. Both companies are based in Austin, Texas. DocbookMD had previously secured $2.2 million in seed funding in early 2012. The company was founded by a married couple who are both practicing physicians: plastic surgeon Tim Gueramy and family physician Trace Haas. Prior to the acquisition, the company’s unified communications product, available as a mobile app and web platform, had been adopted by more than 30,000 healthcare professionals across 42 U.S. states. Physicians can use the system to exchange text messages, photos, charts, X-rays, and similar information.

6. Mad*Pow Acquires Gamified Exercise App HotSeat.Also in March, Mad*Pow, a design agency specializing in healthcare service design, announced the acquisition of HotSeat, a gamified exercise app from Context, a communications consultancy under app developer Fran Melmed. Although the acquisition price was not disclosed, Mad*Pow had previously been one of HotSeat’s developers. HotSeat helps office workers integrate physical activity into their daily routines and encourages others to do the same. The app targets companies with more than 500 employees. Users can engage in simple walking or playful dance exercises during two-minute breaks (the game Melmed demonstrated to MobiHealthNews in 2012 was “Gangnam Style”). Employees can not only choose their own activities but also challenge their colleagues. The app can also sync with users’ calendars to schedule breaks according to their agendas.

7. Fitbit Acquires Coin’s Wearable Payment Platform.In May of this year, Fitbit acquired the wearable payment platform of smart payment company Coin, including its related intellectual property rights. Fitbit also hired key personnel from Coin’s wearable payment platform team. Through this acquisition, Fitbit will be able to integrate near-field communication (NFC) payment functionality into future devices; however, the company stated that it does not currently plan to add these features to any products launched in 2016.

8. Canary Health Acquires bLife.Also in May, Canary Health, a Los Angeles-based startup that uses digital health tools to help people prevent and manage chronic diseases, acquired bLife, a stress management app company, for an undisclosed amount. Canary Health is dedicated to selling its disease management programs to hospitals and health systems, while bLife focuses on developing direct-to-consumer stress management applications and creating apps for clients such as the Oprah Winfrey Network, Deepak Chopra, and The Huffington Post.

9. MedData Acquires Duet Health.Also in May, MedData (note: not Medidata), a healthcare services company based in Brecksville, Ohio, acquired Duet Health, a patient engagement company headquartered in Columbus, Ohio. MedData specializes in providing physician-patient communication tools, revenue cycle management software, as well as consulting and analytics services related to billing and coding. The company serves over 5,000 physicians and operates seven offices across the United States. Founded in 2009, Duet Health offers a white-label patient engagement suite that enables healthcare providers to send secure video, text, and image messages, store images, and view emergency care plans. Its clients include OhioHealth, Cardinal Health, Brigham and Women’s Hospital, Autism Speaks, and the Centers for Disease Control and Prevention (CDC).

10. DocPlanner merges with Doctoralia.In June, Polish online doctor appointment platform DocPlanner announced that it had completed its merger with Spanish Barcelona-based competitor Doctoralia. DocPlanner stated that prior to the merger, the company had 8 million monthly unique users, 90% of whom were from Europe. Although its strongest performance was in the European market, as of last year, the company had established operations in 25 countries, including some in Asia and South America. Meanwhile, Doctoralia also had over 9 million monthly unique users, with most of its traffic coming from Spain, Brazil, and Mexico. The company had been active in 20 countries worldwide. Therefore, the combined entity is expected to have 17 million unique and paying users across 20 markets, the world’s largest database covering 5 million doctors, and 3 million registered users on the joint platform.

11. Royal Philips Acquires Wellcentive.In July, Amsterdam-based Philips acquired Wellcentive, a company headquartered in Atlanta, Georgia, for an undisclosed amount. Wellcentive and its employees will become part of Philips’ Population Health Management business group. Currently, this division offers enterprise telehealth, home monitoring, and personal emergency response systems, and is dedicated to providing personal health services for disease prevention, outpatient care, and the treatment of high-risk conditions across diverse populations.

12. Mindoula Health Acquires Care at Hand.Mindoula Health, a Maryland-based mental health care management company, has acquired Care at Hand, a Boston-based medical analytics firm that provides mobile-based alert systems for patients’ family caregivers. The acquisition amount was not disclosed. Care at Hand raised only $2 million in its seed funding round, including small equity investments from two accelerators: StartUp Health, which co-led the first financing round involving GE and in which Care at Hand participated; and Rock Health, which selected Care at Hand for its second investment in 2011. Care at Hand’s products help home care managers identify and mitigate risk factors by analyzing readmission risk data collected through mobile devices and combined with caregiver surveys.

13. Providence St. Joseph Health Acquires Medicast.Medicast sparked a surge in phone-based appointments for in-home medical care. In July, Providence St. Joseph Health, a healthcare system headquartered in Washington, acquired the company. According to media reports, Medicast initially adopted a direct-to-consumer approach but later began collaborating with healthcare service providers, including its eventual acquirer, Providence St. Joseph, which had become a Medicast client 18 months prior. The founding team of Medicast expressed delight at being acquired by Providence and will join the group’s Strategy and Innovation Department.

14. Gamgee was acquired by an anonymous company.In July, an undisclosed company acquired Gamgee, a digital health startup based in San Mateo, California, which operates businesses including 22otters. Both Gamgee and 22otters officially announced this news on their websites simultaneously, but did not disclose further details.

15. athenahealth Acquires Filament Labs.In August, athenahealth, a provider of cloud-based electronic health records (EHR), practice management software, and population health services, acquired Filament Labs, a medical IT company headquartered in Austin, Texas. Through Patient IO, a care coordination platform developed by Filament Labs, patients can access their care plans by completing a series of actionable daily tasks via smartphone or web applications. Patient IO will serve as the foundation for athenawell, athenahealth’s new patient-facing application. Patient IO enables patients to play a more engaged and sustained role in their own care plans, ranging from medication management and self-reported data recording to gaining a deeper understanding of their health conditions.

16. CRF Health Acquires Entra Health.CRF Health, based in Pennsylvania, is a company dedicated to providing electronic Clinical Outcome Assessment (eCOA) solutions for clinical trials. Also in August, the company secretly acquired the digital health firm Entra Health. This acquisition will expand CRF’s portfolio of mobile and wireless medical devices, helping the multinational corporation build solutions to collect, manage, and analyze biological and clinical trial data. In early 2010, Entra partnered with Nokia, using applications from the Nokia App Store to connect early smartphones with Bluetooth-enabled blood glucose meters developed by Entra.

17. Apple Acquires Gliimpse.The transaction was completed in August. Gliimpse is a startup focused on collecting the “breadcrumbs” scattered within health data. After Apple launched the HealthKit framework in mid-2014, it positioned health data sharing as its entry point into healthcare, and Gliimpse fit well with Apple’s strategy. Additionally, Apple has leveraged electronic health records (EHRs)—most notably those from Epic—to integrate HealthKit data. The code provided by Gliimpse can streamline interactions between Apple products and hospital systems while enhancing Apple’s data security, which are key selling points of Gliimpse.

18. Mapbox Acquires Human.In August, Mapbox, the San Francisco-based open-source mapping platform, acquired Human, a fitness-tracking app. Users can leverage the app to monitor their daily activities and use the collected data to anonymously generate urban insights. As a passive application, Human has a straightforward goal: users earn a “Daily 30” badge by moving for more than 30 minutes each day. Unlike complex workout setups or manual data entry, Human automatically tracks any calorie-burning activity—including cycling, walking, and running—once initial setup is complete. Users can also choose whether to receive notifications upon achieving their “Daily 30” goal. Furthermore, the app is compatible with both iOS and Android systems and integrates with HealthKit.

19. Sharecare Acquires BioLucid.In September, Sharecare announced its acquisition of virtual reality company BioLucid, with the financial terms undisclosed. BioLucid’s technology, which leverages immersive virtual body tours for patient education, will be integrated into Sharecare’s steadily growing suite of patient engagement tools. However, the company will continue to operate its Sarasota, Florida-based entity under the name “Sharecare Reality Lab.” Months earlier, Sharecare founder Jeff Arnold stated in an interview with MobiHealthNews that this marked Sharecare’s 11th acquisition, underscoring the company’s strategic efforts to build a comprehensive patient engagement engine.

20. Glooko and Diasend merge.Some venture capitalists believe that mergers and acquisitions (M&A) driven by complementary strengths represent the future direction of consolidation in the digital health sector. This past September, two major diabetes management companies merged. Glooko, based in California, USA, and Diasend, from Sweden, have combined into a single entity to better leverage Diasend’s global capabilities and Glooko’s user-friendly platform. The joint solution will be implemented under the Glooko brand, serving 4,000 diabetes clinical centers across 23 countries and in 15 languages. The integrated platform aggregates data from more than 160 different devices—including blood glucose meters, insulin pumps, continuous glucose monitors (CGMs), and activity trackers—accounting for 95% of the device data used by diabetes patients worldwide.

21. HCA Acquires Mobile Heartbeat.In September, Hospital Corporation of America (HCA), headquartered in Nashville, Tennessee, and operating 169 hospitals and 116 independent surgery centers across the United Kingdom and 20 U.S. states, announced its plan to acquire Mobile Heartbeat, a developer of clinical workflow and team communication applications. The company did not disclose the terms of the agreement. Previously, HCA had collaborated with Mobile Heartbeat, conducting a pilot study using the CURE software for its iMobile initiative. This project aimed to facilitate smartphone-based communication among intensive care teams. HCA launched this initiative last year, and its staff rapidly adopted the technology.

22. Salus Telehealth Acquires VideoMedicine.In September, Salus Telehealth, based in Georgia, acquired VideoMedicine, a video visit provider headquartered in Chicago. The specific terms of the acquisition were not disclosed. In a joint statement, the two companies stated that the merger would enable Salus Telehealth to deliver a true end-to-end telehealth solution, reduce total healthcare costs, and significantly improve overall health outcomes.

23. Zimmer Biomet Holdings Acquires RespondWell.In October, Zimmer Biomet Holdings, a medical device company specializing in musculoskeletal care, acquired RespondWell, a digital health company focused on gamified home physical therapy tools. The acquisition amount was not disclosed. This acquisition will expand Zimmer’s newly announced “Signature Solutions” portfolio by adding home-based telerehabilitation products. Zimmer will also fully retain its Therapy@Home brand products within the Signature Solutions portfolio.

24. Vital Images Acquires Karos Health.In November, Minneapolis-based diagnostic imaging company Vital Images acquired Karos Health, a clinical information systems manufacturer headquartered in Waterloo, Ontario, Canada, including its flagship patient-facing clinical communication application, Rialto. The financial terms of the acquisition were not disclosed. Founded in 2004, Karos primarily offers two products: the Rialto platform, which facilitates the exchange of clinical images and documents across different healthcare systems and enables patients to easily access laboratory results and images; and EasyViz, a mobile platform for displaying diagnostic images. As Vital Images positions itself as a provider of diagnostic imaging and enterprise information solutions, it is likely that the company targeted Karos Health’s EasyViz in this acquisition.

25. ContextMedia: Health Acquires AccentHealth.The former is headquartered in Chicago and operates as a healthcare decision-making platform, while the latter is a point-of-care patient education company. The acquisition was completed in November; although the financial terms were not disclosed, ContextMedia: Health stated that the transaction was all-cash. Following the acquisition of AccentHealth, ContextMedia: Health will gain access to 55,000 medical practices, supporting 500 million outpatient consultations annually across the United States, and is projected to account for 70% of all healthcare interactions nationwide by 2020.

26. Zipongo Acquires FillMyFork.Zipongo, a digital nutrition platform headquartered in San Francisco, acquired FillMyFork, an incentive-based app designed to promote healthy eating among employees. The acquisition was completed in late November, with specific terms undisclosed. FillMyFork offers a points-based incentive program that rewards users for purchasing healthy foods, aligning seamlessly with Zipongo’s expanding “food benefits management” platform. This platform encompasses multiple apps, all aimed at improving nutritional behaviors by modifying individuals’ surrounding environments.