Digital Health M&A and Private Equity 2023 Deal Activity Overview
As we reflect on the key M&A and private equity deals across the UK digital health sector in 2023 (summarised in the report available for download below), we have highlighted two key drivers of activity which we expect to continue into 2024.
1. Digitising social care
With the ongoing drive for digital transformation of the social care sector, investor and acquirer appetite is high for businesses supporting this digital transition.
Whilst significant progress has been made over the last 18 months, the government’s target of ensuring that 80% of social care providers utilise digital care records by March 2024 will not be met. As at November 2023, c.60% are now utilising digital records up from 40% 18 months ago.
This provides significant further opportunities for care management software providers to penetrate the rapidly growing market and secure valuable recurring revenue streams.
As a result, PE-backed platforms such as Person Centred Software (Cow Corner) and Nourish (LivingBridge) have looked to consolidate the market for care management software, covering both residential and domiciliary care solutions.
Alongside these consolidators, deals have been undertaken by other players such as CareLineLive and Software Circle (formerly Grafenia), as operators look to position themselves to benefit from positive market trajectory.
2. Streamlining clinical pathways
With NHS elective care backlogs reaching 7.7 million and continuing to rise, there is an urgent need for measures to be taken to tackle the situation.
As a result, digital health and technology-enabled offerings which help to streamline clinical pathways and create efficiencies in the system are becoming highly sought after.
This covers a broad range of services and solutions, but includes tech-enabled clinical services (with Medica and 4Ways both going through transactions in 2023), waiting list data validation (DNV’s acquisition MBI Healthcare Technologies), and remote patient monitoring (Doccla’s acquisition of Open TeleHealth and Oysta Technology’s sale to The Access Group).