Mergers & Acquisitions recently named ResMed’s $800 million acquisition of Brightree, a provider of cloud-based software for post-acute care (PAC) providers, as Mergers & Acquisitions' 2016 Mid-Market Deal of the Year—and with good reason. Not only was the acquisition the second-largest healthcare SaaS acquisition ever, but it also demonstrates how software solutions focused on the PAC market are generating intense interest from a broad base of strategic acquirers, as well as technology-focused private equity firms.
Since the beginning of 2016, the PAC technology sector has seen a flurry of M&A activity and infusions of private capital—trends that show no signs of slowing. Shifting a greater proportion of care away from hospitals and physician clinics to lower-cost PAC settings will be a critical element of efforts to control healthcare spending in the United States. PAC providers, however, have traditionally underinvested in software and other technology solutions, which are necessary for efficiently handling higher patient volumes and allowing better connectivity to other medical providers. As a result, technology companies that provide tools to help PAC providers monitor patient outcomes and improve coordination of care face an enormous growth opportunity.