With another year of record-breaking M&A and financings in the books, we’re pleased to provide you with our Year-in-Review of 2021. This year was filled with COVID curveballs and a broader acceptance of our “new normal;” where private and public investors continued to seek broad-based economic exposure across the Healthcare Tech space and all of its sub-segments. Record levels of capital flowed into the private markets: we saw 25 IPOs / SPAC mergers, 502 financings and 326 M&A transactions. While 2020 was the year of virtual health, with industry-defining mergers like Teladoc/Livongo, 2021 M&A was dominated by a string of large cap transactions like Oracle/Cerner, Microsoft/Nuance, Bain and H&F/athenahealth, Optum/Change, Walgreens/VillageMD to name a few.
On the financing front, 2021 saw a major uptick in both the number of transactions and total capital raised. The year’s financing activity totaled ~$33 billion of proceeds, as we saw larger and larger financings and growth equity rounds being announced compared to ~$19 billion of proceeds in 2020. This was a continuation and acceleration of several trends across all sectors with meaningful growth and capital inflows within Provider Tech, Digital Therapeutics, Tech-Enabled Payers & VBC and Pharma-Tech / RWE. There were ten IPOs in 2021, compared to seven in 2020, including Doximity, Agilon Health, Privia Health, Definitive Healthcare, Alignment Healthcare, Convey, Signify Health, InnovAge, Oscar, and Bright Health. Additionally, the SPAC market was highly active which led to an additional 15 completed mergers, compared to only five in 2020. Combining SPACs and IPOs, newly public companies raised $13.7 billion in gross proceeds in 2021, compared to $6.2 billion in 2020.
Turning to the capital markets, 2021 was once again characterized by volatility, with new IPOs and SPACs, in particular, experiencing significant headwinds. Out of the 25 companies in this “New Freshman Class” of publicly traded HC Tech companies, only Doximity and Science 37 outperformed the S&P 500. Of all Healthcare Tech Public Comps, the best performers of the year included OptimizeRx, Doximity, and Evolent Health, ending up 99%, 93%, and 73%, respectively. In total, 42 out of 64 Healthcare Tech Public Comps finished down for the year.
In an overview of M&A activity, Solomon Partners saw 326 announced M&A transactions, including 27 with greater than $1 billion of announced deal values, bringing the total value of announced M&A activity for the year to $152 billion. A few specific acquisitions to note include:
- Oracle’s acquisition of Cerner for $28.3 billion
- Microsoft’s acquisition of Nuance for $19.7 billion
- Bain and H&F’s acquisition of athenahealth for $17.0 billion
- Optum’s acquisition of Change Healthcare for $13.5 billion
- Nordic Capital’s take-private acquisition of Inovalon for $7.3 billion
- Walgreens’ majority acquisition of VillageMD for $5.3 billion
- UnitedHealth’s acquisition of Landmark for $3.5 billion