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M&A drivers in healthcare communications

By James West

James West

Pharma is under pressure. The route to successful commercialisation and sustained market share continues to evolve in response to the changes spanning the industry, namely: declining R&D productivity, the demise of the blockbuster model, increased utilisation of data and technology and changing consumer behaviour.

As the stakeholder group has evolved, pharma companies are looking for the most effective ways to inform customers, whether they are patients, healthcare professionals or payers, about the benefits of their products using the most innovative methods. At the same time, government agencies are also seeking to increase patient awareness and education, and encourage disease prevention.

These factors have led to an increase in the number of specialist communication companies excelling
in their chosen niche. These pockets of high-growth, exciting businesses have fuelled company mergers and acquisitions (M&A) in the healthcare communications sector over the last five years, and the trend looks set to continue in 2019 with eight transactions having taken place in Q1 already.

One factor increasing M&A is the growing involvement from private equity that is looking to invest further in the sector, driving up company valuations and catalysing follow-on acquisitions. Key examples include LDC’s £11m minority investment in Lucid Group in 2017 and Amulet Capital’s acquisition of Open Health at the end of 2018.

The global nature of the industry has led to a rise in cross-Atlantic deals with buyers looking to expand their footprint and independent agencies realising synergistic benefits from being part of a globally connected

group. For example, Avenir Global, a Canadian holding company, now has a global healthcare operation of around 250 people with the acquisition of Cherry in November 2018. LDC also provided follow-on funding for Fishawack to expand with the acquisition of US-based Blue Latitude Health, Dudnyk and brand communications agency Healthcircle.

As the role of industry, regulators and the expectations of patients continue to develop, we see increasing opportunities for acquisitive organisations to partner with fast growing, exciting agencies and communications specialists.

James West, Director, Results Healthcare

In association with

Results healthcare

5th June 2019

From: Marketing

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