The fast pace of technological change is posing an issue for companies interested in acquiring healthcare organizations, according to a joint report by West Monroe Partners and Mergermarket.
West Monroe Partners and Mergermarket polled 100 market practitioners about the role of technology in the healthcare mergers and acquisitions landscape. Healthcare M&A has exploded in recent years, with 579 deals across U.S. healthcare targets in 2017, the second-highest total on record, according to the report.
Here are four insights:
1. Only 10 percent of survey respondents indicated they were "very satisfied" with IT due diligence in their recent healthcare deals.
2. Twenty-six percent reported outdated IT infrastructure was the biggest oversight during due diligence in their most recent healthcare acquisition.
3. Almost half of respondents — 49 percent — said they were dissatisfied with compliance and cybersecurity due diligence in their recent healthcare deals. Fifty-eight percent of respondents reported they discovered a cybersecurity problem at an acquired healthcare company after closing the deal.
4. The plurality of respondents — 36 percent — agreed the biggest challenge to healthcare companies during the next one to three years will be the fast pace of technological change. This sentiment is driving M&A interest among companies with up-to-date IT systems, according to the report.
To access West Monroe Partners and Mergermarket's report, click here.