February 28, 2014

Healthcare Consulting M&A Market Activity Continues

The Healthcare Consulting M&A market is hot.  This week another healthcare-focused consulting firm, Galloway Consulting, was picked off by a larger, data-oriented healthcare services firm, iVantage Health Analytics. Galloway is a strategic advisor to Hospitals specializing in operational transformation geared towards improving quality of care, efficiencies, and profitability. The Company leverages its proprietary model to improve performance in a sustainable way while ensuring rapid results and accelerated turnaround. The transaction comes just three months after of iVantage’s November acquisition of Xylem Consulting, the hospital strategy development firm.

iVantage, which Great Point Partners funded in June 2013, has used its equity capital infusion to become an active player in the M&A market.  Galloway is the third firm acquired by iVantage in that short span. Consistent with the trend we are seeing in the marketplace, private, sponsor-backed strategic firms are aggressively utilizing M&A to expand their offerings, expertise and geographic presence to build scale far more quickly than peers that go-it-alone.

Less than 60 days into 2014 and we can already see the continuation of the heightened level of M&A activity in the consulting sector that started early in 2013. Premium values continue to be driven by deep expertise in specific verticals like healthcare. Recent deals in the space, including all three of iVantage’s purchases, highlight the market’s strengthened focus on the intersection between data, technology and advisory services. Professional services firms that hone expertise around efficiencies, throughput, and revenue generation continue to see strong demand from both strategic and financial buyers. We believe the appetite in the market will remain strong throughout 2014 as firms work to strategically position themselves in the evolving dynamic healthcare landscape.