By Joel Stinnett, Reporter, Nashville Business Journal
Nashville’s health care industry has had two busy years of merger and acquisitions activity, and the sector’s increasing demand for technology solutions may be why.
More than 58 percent of health care executives say technology is their primary solution to business challenges, according to LBMC’s 2019 Business Outlook Report. About 18 percent of those executives are open to making acquisitions in the new year.
Lisa Nix, leader of health care transaction advisory services with LBMC, said those statistics correlate with what the firm is seeing in their local M&A practice. She said LBMC saw a spike in health care IT transactions last year, as well as a 30 percent increase in health care M&A overall in 2018.
“Companies want to drive efficiency through their technology,” Nix said. “There are more opportunities in health care to use big data more effectively and it’s not as cost prohibitive as it once was.”
Nix said her firm has also seen an increase in dental and behavioral health transactions.
The report polled more than 300 executives across multiple industries on their business expectations for the new year. Topics included expected revenue, hiring, capital spending and growth.
While LBMC provides services to health care clients in 44 states, more than 75 percent of the study’s respondents were headquartered in Nashville.
Nix said the increase in health care IT deals has been fueled by consumer demand for the technology and concerns from executives over cybersecurity. Her practice has also seen a larger emphasis from buyers and sellers to speed the pace at which deals get done.
“It’s just a way of making sure the deal’s value stays in place,” Nix said.
Nashville ranked No.5 in terms of the overall value of M&A deals closed since 2015, according to a report recently released by financial market analyst and research firm Mergermarket, with $30 billion of transactions.