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Digitising Social Care: M&A Overview

An overview of how the digitisation of social care is driving mergers & acquisitions and private equity investment.

An overview of how the digitising of social care is driving M&A activity

In recent years, the social care sector has undergone a significant transformation, with digital innovation playing a pivotal role in reshaping the landscape. In 2021, the government’s white paper on adult social care reform committed to investing £150 million to digitise the adult social care sector. Lack of digital infrastructure in social care can cause data gaps, duplication and a lack of standardisation. This leads to a burden of inefficient data management and data sharing, which can negatively impact the quality of care provided. Allowing seamless data exchange and communication between different healthcare providers will contribute to a more holistic approach to patient care.

Whilst significant progress has been made over the last 18 months, the government’s target of ensuring that 80% of CQC registered 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.

With the ongoing drive for digital transformation of the social care sector, investor and acquirer appetite is high for businesses supporting this digital transition. 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.

This digitisation of social care is not merely a trend but a fundamental shift that is reshaping the way care is delivered. As technology continues to advance and industry players adapt, the social care sector is on a trajectory toward more efficient, patient-centric, and digitally-driven care services. This will undoubtedly drive further M&A activity in the future.


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