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 Q4 2024
✓ Merger activity continued into the winter at slightly reduced levels compared to prior quarters. In the fourth quarter of 2024, four new acquisitions were identified within the life sciences commercialization support markets we monitor for our clients. This volume of M&A is consistent overall with the general ongoing trend over the past few quarters which generally averages 5-6 deals per quarter and had spiked briefly in Q3.
✓ In the healthcare marketing space, the merger of Omnicom and Interpublic, creating the largest agency in the world with more than 100,000 employees, will have an effect on the healthcare agency dynamics, with specifics to play out over the next few quarters and years. We are watching this dynamic and will report in future updates.
✓ In addition to new M&A activity, we note acquirers beginning to announce integrated offerings built from acquisitions done in prior periods. Several firms reintroduced capabilities to the market, launching new companies, division names, and offering names, often using bundles with expanded capabilities. Some are integrated and coordinated offerings across world regions, and some are expanded offerings from internal and acquired capabilities.
✓ In addition to M&A activity, we note an increased use of strategic partnerships between firms to support their clients with broader offerings than individual firms can offer themselves.
✓ The market momentum around AI continues to drive activity. AI continues to be very visible in the market messaging about both new acquisitions and the reintroductions of capabilities acquired in prior periods.
✓ The acquisition of specialty delivery channels for health care offerings has driven several acquisitions over the past few quarters, including the distribution of products/services via mental health clinics, home health care, as well as other non-physician office-based settings.
2024 Q4 Activity highlights
In the fourth quarter of 2024, M&A activity continued into the new year, with four deals identified in the markets we monitor for our clients. The following deals were identified.
1. HHAeXchange acquires Sandata (October 2024)
HHAeXchange announced that it acquired fellow homecare solution provider Sandata Technologies to optimize billing and claims processing on its platform. The strategic acquisition is meant to bolster HHAeXchange’s position in the rapidly growing home care industry, which the company reports is expected to rise roughly 50% between 2020 and 2035.
HHAeXchange is a technology platform developed specifically for Medicaid home- and community-based services. It connects state agencies, managed care organizations, providers, and caregivers in a single homecare ecosystem. By leveraging Sandata’s technology for scheduling, billing, payroll, and more, HHAeXchange seeks to improve its ability to support the billing needs and compliance requirements of its users.
2. MAP Group acquires SKC (November 2024)
The MAP Group, a pan-European specialist pharmaceutical and biotechnology strategic consultancy, announced that it has acquired SKC Beratungsgesellschaft mbH, a strategic consultancy based in Hannover, Germany. SKC supports life sciences companies with complex strategic issues and will join forces with the MAP Group’s operations in more than 20 markets, including the UK, Ireland, and Benelux. The business explained that one justification for the acquisition was the fast-approaching EU-Health Technology Assessment (HTA) as well as the desire to provide comprehensive cross-country support for their clients. This acquisition builds on another acquisition executed earlier in 2024 of the Belgium-based consultancy, AxTalis, which broadened the Group’s capabilities, including regulatory strategy, compliance, and medical affairs.
3. ChapsVision acquires Sinequa (November 2024)
ChapsVision, a European-based supplier of AI-enriched data processing, announced the acquisition of Sinequa, an enterprise search engine capability augmented by Retrieval-Augmented Generation (RAG). Sinequa, recognized by Gartner and Forrester, has been capitalizing on the expanding market for industry-specific generative AI. It has a wide range of clients both within and outside of life sciences. ChapsVision plans to leverage Sinequa’s technology to help organizations accelerate the adoption of AI and generative AI, transitioning from experimental to fully operational solutions within secure environments. This acquisition will enrich ChapsVision’s flagship ArgonOS platform by expanding its data collection capabilities with Sinequa’s extensive connector library and enhancing its search functionality with Sinequa’s state-of-the-art search and RAG technology.
In addition to expanded technological capability, the acquisition supports ChapsVision’s international expansion plans, particularly in Europe and North America.
4. Omnicom to acquire Interpublic Group (December 2024)
Omnicom has announced that it has struck a deal to join forces with Interpublic Group, bringing together more than fifty marketing and sales brands that generated a combined $3.7 billion in pharmaceuticals and healthcare revenues over the first three quarters of 2024. The combined firm will be the world’s largest ad agency. Omnicom explained the merger as a deal that will “bring together the industry’s deepest bench of marketing talent, and the broadest and most innovative services and products, driven by the most advanced sales and marketing platform.” The combined company will employ more than 100,000 people and aims to generate $750 million in cost savings, mainly within the first two years. While both Omnicom and IPG operate to support clients in a wide range of markets, pharmaceuticals, and healthcare revenues accounted for roughly 20% of total sales across the two businesses.