The latest insights on M&A activity in life sciences commercial vendors

As part of our LINX bio-pharma vendor review, Zensights is pleased to share an update on merger activity to help our ZEN members understand the market activity that may impact their supplier relationships.

Key M&A highlights in Q3 2024

✓ Merger activity continues into the autumn at an increased pace. In the third quarter of 2024, merger activity increased, with eight acquisitions identified within the markets we monitor for our clients. The volume of M&A was lower in each of the past few quarters, averaging 5-6 deals per quarter. 

✓ The market momentum around AI continues to drive activity, with several deals involving AI-related justifications. These included both companies purchasing capability to expand offerings and also selling (or spinning off) previously acquired AI capability. Companies continue to explore the right way to build and maintain this new capability and explore the best way to deliver it to their clients.

✓ Connected health continues to drive M&A activity, but companies are hitting limits with data management challenges. A study from CapGemini revealed that while significant revenue is expected for providers from connected health offerings, and that the digital capabilities have matured, but that the issues with the data management required to drive them may dampen business opportunities.

✓ Agencies are safeguarding themselves from being edged out by tech platforms by using M&A. The encroachment of marketing platforms (TikTok, etc.) and AI automation into what was previously done by people at agencies has led to tech+people approaches to identify customer and market insights that either alone would miss. This has led to both people-based agencies acquiring technology and technology providers acquiring people (or partners).

✓ PE involvement in M&A deals remains high. A number of the deals announced this quarter were driven by PE-funded acquirers executing rollups and expanding offerings using M&A. 

2024 Q3 Activity highlights

In the third quarter of 2024, M&A activity continued into the new year, with eight deals identified in the markets we monitor for our clients. The following deals were identified:

 1. Fabric acquires Walmart’s telehealth platform MeMD (July 2024)

Healthcare AI startup Fabric acquired Walmart’s telehealth platform MeMD, broadening its virtual care services to include 30,000 employers and 5 million members. Fabric CEO Aniq Rahman said “the combination of our teams, technology and clinicians strategically positions Fabric to quickly expand across payers, employers and provider organizations.”

The deal follows a few months after Walmart announced it was exiting its virtual care service business and closing all of its health centers in the US due to reimbursement challenges and “escalating operating costs.” MeMD, which was purchased by the retail giant in 2021, provides on-demand virtual behavioral, urgent, and primary care to its corporate, institutional, and health plan clients. 

 2. Finn Partners has purchased Claudine Colin Communication (July 2024)

Finn Partners has acquired Claudine Colin Communication, a Paris-based PR agency. This acquisition is part of a global expansion by Finn Partners, and significantly adds to their Paris team. Claudine Colin Communication offers clients support with media relations, partnerships, digital campaigns, institutional relations and crisis communications. 

This is the next in a long line of acquisitions for Finn Partners over the past few years, including the expansion of its global health and policy operations with the previous acquisition of Hyderus, an Irish health-focused firm whose work spans Europe, Africa, Asia and Latin America.

3. Zimmer Biomet to acquire OrthoGrid Systems (August 2024)

Zimmer Biomet announced a definitive agreement to acquire OrthoGrid Systems, company focused on AI-driven surgical guidance systems for total hip replacement. The deal includes OrthoGrid’s fluoroscopy-based surgical assistance platform, Hip AI, as well as two more FDA-cleared orthopedic applications and over 40 patents. HipAI assists orthopedic surgeons with intra-operative decision-making and execution of both posterior and direct anterior total hip arthroplasties by providing real-time image analysis, automated measurements of leg length and offset, and guidance on optimal cup placement. 

4. Supreme Group, backed by Trinity Hunt Partners, acquired BioStrata (August 2024)

Supreme Group (US) has acquired Cambridge (UK)-based life science PR and marketing agency BioStrata. The deal “marks a significant milestone on our path to building a world-class platform serving a broad range of companies in life science and healthcare,” according to Tom Donnelly, chief executive of Supreme Group. “BioStrata’s integrated communications and marketing expertise will enable us to better serve the diverse needs of life science companies, broaden our client base, and further expand our footprint in the U.K. and Europe,” he said.

BioStrata will continue to operate under its brand name as a standalone organization within the Supreme Group. Clare Russell, co-founder and managing director of BioStrata, said: “This partnership strengthens our position in the life science marketing landscape and enhances our service offering with specialized digital expertise.” The acquisition comes just months after the Supreme Group, which is backed by private equity firm Trinity Hunt Partners, acquired US-integrated specialist agency Health+Commerce. 

5. Swoop spun out from Real Chemistry with backing from New Mountain Capital (September 2024)

AI-focused healthcare agency Swoop has spun off from Real Chemistry, Swoop and private equity firm New Mountain Capital said this week. Swoop was acquired by Real Chemistry in 2021 and has operated as a unit of the network, which has been backed by New Mountain Capital since 2019.  

The two agencies will maintain a “preferred partnership arrangement,” according to the investment firm. New Mountain will continue to support both firms and provide additional investment flexibility to pursue expansion for each agency. Swoop president Scott Rines praised the spinoff, saying his agency is “ready to take healthcare marketing to the next level.”

6. EQT to acquire GeBBS Healthcare Solutions (September 2024)

EQT announced that the BPEA Private Equity Fund VIII (“EQT Private Capital Asia”) has agreed to acquire a controlling beneficial interest in GeBBS, a global provider of healthcare outsourcing solutions, from ChrysCapital. GeBBS offers a range of services that help US-based healthcare providers improve their financial performance by optimizing revenue cycle management (RCM) processes and ensuring accurate coding and billing practices. The unconsolidated global RCM services market continues to witness significant growth, driven by long-term trends such as growing patient volumes, increasing complexity within US healthcare operations, and limited availability of skilled resources for critical functions. 

GeBBS is expanding its solutions suite, which spans the front, middle and back-end of the RCM value chain. The Company was founded in 2005 and has established a global footprint of 13,000 employees spread across the US, India, Dominican Republic and Philippines. It maintains strong relationships with a diverse range of customers across US-based hospitals, physician groups, and other healthcare firms.

ŌURA, the health technology company behind the Oura Ring smart device, announced on Wednesday that it has acquired fellow Finnish firm Veri, a personalized metabolic health startup. Veri offers an app that gives users guidance on healthy food and habits based on data from continuous glucose monitors (CGMs). Worn on a finger, the Oura Ring employs a trio of sensors to track an individual’s sleep, activity, and readiness to provide daily wellness recommendations. 

ŌURA CEO Tom Hale said that 97% of the company’s user base have expressed interest in understanding how their food intake impacts their health, with 13% indicating that they have worn a CGM, and 53% reporting interest in wearing a CGM in the next 12 months. ŌURA has sold over 2.5 million rings and more than doubled its member base over the past year.

8. Relevate Health acquires Level Ex Games Pharma from Brainlab (September 2024)

Relevate Health Group announced that it has purchased the pharma and life sciences division of Level Ex Games from Munich-based technology company Brainlab. The sale represents a strategic alignment for both companies, allowing each to accelerate the adoption of Level Ex technology in their respective areas and deliver enhanced value to healthcare professionals and patients. Relevate Health will work with Level Ex Games, the leading developer of medical video games, to reach more HCPs through their proven and trusted data-driven omnichannel engagement approach.

Game-based learning is an increasingly preferred method of continuing education for clinicians as they endeavor to build their skills and strengthen the quality of their care. However, to date, adoption has been limited due to the lack of quality games. Relevate Health is poised to help HCPs in the pharma space quickly and easily access these educational games as part of their everyday digital experience. “Relevate has admired Level Ex’s mission, quality, and impact for years,” says Pantello. “We are incredibly excited to be partnering with this pioneer and innovator in HCP learning and look forward to helping them drive their mission forward.” 

Under the finalized agreement, Brainlab’s Level Ex pharma business unit will be rebranded as Level Ex Games Powered by Relevate Health. Relevate Health, an expert in HCP omnichannel activation for leading pharmaceutical and life science companies, is ideally positioned to scale and expand this side of the Level Ex pharma portfolio.