HCIT and Technology Enabled Services Sector Update

Read more about M&A trends and activity in this sector

HCIT and Technology-Enabled Services Sector Update

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Information technology and technology enabled services continue to be central to the healthcare industry. With 60% of U.S. adults estimated to have a chronic disease and 40% of U.S. adults estimated to have two or more chronic diseases, providers and payors seek technology that supports better care coordination across the healthcare ecosystem to improve long-term disease management and better manage the cost associated with providing this care.

Select HCIT Themes

  • Shift to Ambulatory and Post-Acute Care
  • Shift to Value-based Care Models
  • Solutions for Self-Funded Benefits
  • COVID and the Acceleration of Virtual Care


01. Capital Markets Update

Despite the downturn at the onset of COVID-19, the February and March 2020 market correction proved to be short-lived

  • Equity markets quickly rebounded through the remainder of 2020 and peaked in January 2022
  • Macro-economic issues (e.g., inflation, Ukraine conflict) have led to market declines since then
  • Public HCIT companies outperformed the broader markets through February 2021, hitting its peak a year before the broader markets, mainly due to waning enthusiasm around telehealth and technology-enabled care
  • Consistent with the broader markets, IPO activity in the first half of 2022 ground to a halt
  • While private placement activity has slowed, 2022 could still end above levels achieved pre-COVID-19 with transactions addressing a broader scope of healthcare themes

02. M&A Markets Update

2021 was a record year for the M&A markets fueled by hopes of an improving economy, concerns around potential changes to capital gains treatment,  and pent-up demand for deals put on hold at the onset of COVID-19

  • While transaction volumes through July 2022 trail 2021, 2022 remains on-track to exceed pre-pandemic levels
  • Sellers include a mix of financial sponsors, strategic divestitures, public, and private entities
  • Financial sponsors and non-HCIT strategics so far have been the most active buyers this year
  • Strategic HCIT companies are making more selective acquisitions
  • While still important to care delivery, transactions focus less on virtual care and more on general healthcare themes (e.g., revenue cycle management, value-based care, advanced analytics)

HCIT Underperforming S&P 500

HCIT M&A Activity

Telehealth and technology-enabled care dominated headlines in 2020 and 2021. While remaining an important part of the care model, transactions like Amazon’s acquisition of One Medical highlight the value of primary care as gatekeepers and that brick-and-mortar still matters in a blended virtual/in-person care model.


We hope you find this information valuable, and as always, feel free to reach out if you would like to discuss in further detail. To read the full report, download the PDF below.

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HCIT and Technology-Enabled Services Sector Update

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Walter Olshanski
Managing Director, KPMG Corporate Finance LLC

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