Q3 2016 Digital Health M&A and IPO Activity: 15 Acquisitions, 1 Merger, and 2 IPOs Reshape the Industry

Mobliehealth reported that 2016 had already proven to be a year with a significantly large number of mergers and acquisitions in the mobile health industry. It is worth mentioning that the third quarter was particularly representative of this hot M&A trend in 2016, completing 15 acquisitions, one merger, and two IPO projects. VCBeat (WeChat ID: vcbeat) has compiled the details for you.

1. Apple AcquisitionGliimpse。In the digital health sector, the most notable headline-grabbing acquisition this year is Apple’s purchase of Gliimpse, a startup focused on health data. The financial terms of the deal have not been disclosed. Anil Seth, the company’s founder, was inspired to establish Gliimpse after his sister was diagnosed with cancer. At its core, the company’s business involves collecting consumers’ “fragmented health data, akin to breadcrumbs,” and building a health data aggregation platform. According to the Gliimpse website, after personally implementing this data collection process with patients, the resulting aggregation platform can address interoperability challenges at the backend.

Apple and the EHR GiantEpic Integration.Since Apple launched the HealthKit framework in mid-2014, it has partnered with Epic, a highly prominent electronic health record (EHR) vendor, to integrate HealthKit data. At that time, they recognized that health data sharing could serve as an entry point for advancing into healthcare, leading to the seamless integration of Gliimpse into this initiative. Gliimpse’s code facilitates interoperability between Apple’s products and hospital systems, while also enhancing security safeguards for Apple’s offerings—both of which were Gliimpse’s key selling points.

2.Mapbox Acquires Fitness Tracking SoftwareHuman。In another notable acquisition, the acquirer was Mapbox, a company that originally started out in digital health gaming. Headquartered in San Francisco, Mapbox operates an open-resource mapping platform and acquired Human, a fitness tracking software that continuously monitors user activity throughout the day and anonymously aggregates data to generate urban insights. Human is a passive app with a simple goal: move for more than 30 minutes each day, also known as “Daily 30.” It does not involve complex workout settings; instead, data is automatically recorded with each use. Users can simply enable the app to begin tracking activities such as cycling, walking, running, or any other calorie-burning exercises. If users achieve their “Daily 30” goal, the app provides selective notifications. Currently, Human has integrated with HealthKit and is available for installation on both iOS and Android platforms.

3.Royal Philips Acquires Population Health Management Platform WellcentiveOther acquisitions have also demonstrated some companies’ desire to consolidate as many technological capabilities and growth opportunities as possible under one roof. Amsterdam-based Royal Philips announced the completion of its acquisition of Wellcentive, a population health management software company headquartered in Atlanta, Georgia, with the financial terms undisclosed. Upon completion of the transaction, Wellcentive and its employees will become part of Royal Philips’ Population Health Management business group. Currently, Royal Philips primarily offers enterprise telehealth, home monitoring, and personal emergency response systems, along with personal health services catering to diverse client segments ranging from preventive care and outpatient care to high-risk patients.

4. Athenahealth AcquisitionHealthcare Collaboration Platform Patient IO.AthenahealthThe company is a provider of cloud-based EHR, practice management software, and population health services. It has acquired Patient IO (formerly known as Filament Labs), an Austin-based care coordination platform that enables patients to access their care plans via a web application through a series of actionable daily tasks. The financial terms of the acquisition were not disclosed. Patient IO will serve as the foundation for AthenaWell, Athenahealth’s new patient-facing application. Patients can use Patient IO to play a more engaged and continuous role in their own healthcare, including medication management and recording self-reported data, thereby gaining a more comprehensive understanding of their health status. This new suite of services builds upon the company’s 2013 acquisition of Epocrates, which marked Athenahealth’s strategic shift toward mobile health.

Meanwhile, we also explored the implications of this acquisition for cloud technology providers specializing in electronic health records (EHR) and population health management. We believe that this acquisition demonstrates athenahealth’s growing emphasis on patient engagement in chronic disease management. This marks the second acquisition under athenahealth’s “More Disruption Please” accelerator program, following the first acquisition of Arsenal Health.

5.Sharecare's Largest Acquisition.Healthways, a Nashville-based company focused on employee health, has agreed to sell its population health business unit to Atlanta-based Sharecare. In an interview with MobiHealthNews, Sharecare CEO Jeff Arnold described the acquisition as “our largest acquisition to date.” Arnold also stated that Sharecare will issue $30 million in common stock to Healthways in exchange for its population health business, which includes 1,700 employees and is expected to generate approximately $259 million in annual revenue for Sharecare. Healthways will also provide Sharecare with an upfront $25 million fund to cover anticipated negative cash flows. If losses exceed $25 million, Sharecare may reduce the stock payment by up to $10 million.

6.Sharecare Acquires Virtual Reality Company BioLucid.Sharecare Announces Acquisition of Virtual Reality Company BioLucid; Financial Terms UndisclosedSharecare has announced its acquisition of the virtual reality company BioLucid, with the purchase price remaining 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 business under the name “Sharecare Reality Lab.” In an interview with MobiHealthNews several months ago, Arnold noted that this marks Sharecare’s 11th acquisition, underscoring the company’s strategic efforts to build a comprehensive patient engagement engine.

“Our vision is to become the only health app on users’ phones, because users don’t use 12 apps to manage their finances, nor do they use 12 apps to manage their health.” Meanwhile, Arnold also stated, “Over the past few years, we have completed more than 10 acquisitions, all of which we believe are key components that can be integrated together to manage users’ physical health.”

7.Glooko andDiasend Merger and Integration.Successful corporate mergers that leverage complementary strengths represent the direction of future acquisitions in digital health, as noted by some venture capitalists. A real-world example emerged this September with the merger of two major diabetes management companies: Glooko from California and Diasend from Sweden. They have combined into a unified entity, leveraging both Diasend’s global capabilities and Glooko’s user-friendly platform. This 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 downloads data from more than 160 different devices, including blood glucose meters, insulin pumps, continuous glucose monitors, and activity trackers, accounting for 95% of the device data used by diabetes patients worldwide.

“Glooko and Diasend both dominate their respective markets, driven by product differentiation and the distinct market demands each company addresses,” Vikram Singh, Product Analysis and Marketing Manager at Glooko, explained to MobiHealthNews in an email. “Rather than expanding internationally on a company-by-company basis, a merger makes far more strategic sense.”

8.iHealth Labs Acquires Device Service ProvidereDevice。We also identified a device manufacturer that acquired a company providing backend infrastructure for integrated devices. iHealth Labs, the connected-device subsidiary of Andon Health based in Paris, acquired the French company eDevice for $1.06 million (€98.33 million).

eDevice is a European service provider that offers backend infrastructure for remote monitoring devices connected to healthcare institutions such as hospitals. iHealth, one of the pioneers in smartphone-connected health solutions, has provided users in the United States, Europe, and China with a range of products including smart scales, activity trackers, blood pressure monitors, and glucose meters. Recently, the company has shifted from a basic direct-to-consumer model to a B2B model through its product offerings. Its health management system includes the iHealth Gateway, a secure hub that collects data from various home-use iHealth devices as well as software systems designed for diabetes management, outpatient care, and population health. The acquisition of eDevice appears to be another step forward in this direction, as eDevice’s technology will help iHealth transmit data from its diverse devices to healthcare service providers.

9.HMS Holdings CompletedThe Acquisition of Essette.YesWe have also observed acquisitions involving the integration of unified communications and workflow management technologies. HMS Holdings, which owns several subsidiaries providing software tools, has completed the acquisition of Essette. Essette is an online care management platform that assists healthcare institutions with population health management and patient engagement. The transaction was conducted in cash for $20 million. Essette collaborates with healthcare delivery organizations that assume a certain level of financial risk, including managed care organizations and health service providers. Its software helps medical teams coordinate care, enables enterprises to manage multiple healthcare data repositories, and improves communication between patients and providers.

10. HCA AcquisitionMobile Heartbeat, Inc.Nashville, Tennessee-based Hospital Corporation of America (HCA) operates 169 hospitals and 116 independent surgery centers across 20 U.S. states and the United Kingdom. The company has announced its acquisition of Mobile Heartbeat, a developer of clinical workflow and team communication applications; specific terms of the agreement have not been disclosed. Mobile Heartbeat’s core technology, Clinical Urgent Response (CURE), is accessible via an app on any iPhone or Android device. It integrates a unified user experience for caregivers both within and outside the hospital, enabling nurses and physicians to hand off tasks to one another. Caregivers can send text messages, make phone calls, view patient information, receive laboratory alerts, and respond to nurse calls. The app’s features help streamline clinical communications, including secure handling of alarms and notifications, patient information, laboratory data, text messages, voice recordings, and photos. This acquisition follows pilot studies of CURE conducted by Mobile Heartbeat for HCA’s iMobile Project, an initiative that leverages smartphone-based sharing services to enhance communication among critical care teams. HCA launched this project last year, and the technology was adopted immediately.

11.Acquisition of CRF HealthDigital Health Pioneer: Entra Health.CRF Health, a Pennsylvania-based provider of electronic clinical outcome assessment (eCOA) solutions for clinical trials, has acquired Entra Health, a pioneer in the digital health sector, for an undisclosed sum. This acquisition will expand CRF Health’s product offerings into the mobile and wireless medical device market, helping the company build a global network of solutions to collect, manage, and analyze biometric and clinical trial data. A representative from CRF Health stated in a press release that the acquisition of San Diego-based Entra Health formalizes their existing relationship. Entra Health rose to prominence in 2010 when it partnered with Nokia to make its app available on the Nokia App Store, enabling early smartphones to connect via Bluetooth to blood glucose meters.

12.Care at Hand Acquires Mental Health Management PlatformMindoula Health 。Mindoula Health, a Maryland-based mental health care management company, has been acquired by Care at Hand, a Boston-based medical analytics firm. The acquisition price was not disclosed. Care at Hand provides mobile-based alert systems for patients’ family caregivers. In its seed funding round, Care at Hand raised only $2 million, including small equity investments from two accelerators: StartUp Health, which co-led the first financing round involving GE; and Rock Health, which selected Care at Hand for its second investment batch in 2011. Care at Hand’s product helps home care managers identify and mitigate risk factors contributing to hospital readmissions, leveraging data analytics derived from mobile devices combined with caregiver surveys.

13.Gamgee was acquired.An unnamed company has acquired Gamgee, a California-based digital health startup that operates the 22otters business; however, neither the Gamgee nor the 22otters website has disclosed any information regarding the acquisition.

14.Thoma Bravo AcquisitionImprivata。Imprivata, a Lexington, Massachusetts-based company specializing in IT security tools, has agreed to be acquired by an affiliate of Thoma Bravo, a San Francisco-based private equity firm, in a transaction valued at approximately $544 million. Under the terms of the agreement, shareholders of record will receive $19.25 per share in cash for each share of Imprivata’s common stock, representing a 33% premium over the company’s final closing price of $14.50.

15. Providence St. Joseph Health’s Acquisition of Medicast in Washington State, we have witnessed the acquisition of a communications and messaging platform by a health system. Medicast stated, “We are pleased to announce that Medicast has been acquired by Providence St. Joseph Health, and we will be joining the health system’s Strategy and Innovation Group.” “We are thrilled that Providence St. Joseph Health recognizes the value of our technology and team. We will continue to develop excellent new features and integrate them into our platform. As Providence St. Joseph Health brings healthcare into the digital age, the Medicast platform will be a key component of this broader strategy, ensuring that more patients can tangibly experience convenience and human-centered care.” Medicast initially launched with a direct-to-consumer mindset but later began collaborating with providers, including its eventual acquirer, Providence St. Joseph Health, which had been a client of Medicast for approximately 18 months.

16.Nashville-based employee health company Healthways spun off MeYou Health.This is an innovation and digital health subsidiary based in Boston. Rick Lee is a serial entrepreneur who sold the early-stage digital health platform Healthrageous to Humana in 2013. He has rallied a group of investors, including Ballast Point Ventures,

Blue Shield of California, along with several prominent individual investors, acquired MeYou Health for $11 million. Rick Lee will serve as the CEO of the newly independent MeYou Health.

The surge of numerous IPOs has not recurred; only two were tracked by MobiHealthNews this quarter.

Located in Burlington, MassachusettsEverbridgeThe company provides emergency communication platforms to numerous enterprises and government agencies, and has established the terms for its initial public offering (IPO). According to the company’s SEC filings, the IPO is set at 7.5 million shares, with a price range of $11 to $13 per share, implying a midpoint valuation of $90 million. Everbridge, which currently serves more than 3,000 customers worldwide, was founded in the aftermath of the 9/11 attacks, when significant gaps in many communication systems became starkly apparent. Among the many other IT organizations it serves,Everbridge provides a SaaS-based critical communication platform to the emergency departments of over 800 hospitals.. Meanwhile, the company also provides a real-time alert management platform, where each organization can create customized communication methods. In the event of an emergency, the system fully utilizes all available communication channels—including text messages, emails, voice calls, and chat—to maintain contact with all recipients until message receipt is confirmed.

iRhythm is a manufacturer of wearable wireless devices (unaffiliated with the Zio heart rate monitoring system) that filed documents with the U.S. Securities and Exchange Commission (SEC) to raise $86 million in its initial public offering (IPO).

NowiRhythm’s sole product, the Zio Patch, is a small wearable sensor., which can be used for multi-day monitoring (up to two weeks) of arrhythmias in patients with heart disease. Unlike typical devices in this field, it does not transmit data wirelessly to a mobile device; instead, the data are stored within the patch itself and sent back to iRhythm at the end of the monitoring period.