1 Sources: ThomsonOne, Bloomberg Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does not consider the specific investment objectives, financial situation and particular needs of any individual person or entity. ($ in millions) Healthcare IT Sector Review: Publicly-Traded Healthcare IT Sector Summary Number Aggr. Median TEV / Median Price / of Equity Mkt. Median % Change LTM Multiples Earnings Ratio Companies Value 3 mos. 12 mos. Revenue EBITDA 2017 2018 Provider-Focused 17 $43,888 12.3% 15.6% 3.2x 13.8x 24.0x 19.9x Payer-Focused 7 11,584 6.1 (5.0) 3.8 17.2 27.6 25.2 Life Sciences-Focused 4 11,965 11.3 72.4 5.7 32.7 32.6 31.6 Consumer-Focused 2 2,361 (1.8) 78.7 2.3 9.8 19.5 18.1 Diversified / Consulting 5 27,378 6.9 15.4 1.3 9.7 18.0 16.3 Total / Median (unweighted) 35 $97,176 6.9% 15.6% 3.2x 13.8x 24.0x 19.9x FY2017 FY2018 Value at % Change Price / Earnings Ratio 4/30/2017 3 mos. YTD 12 mos. 36 mos. 2017 2018 Dow Jones Industrial Average 20,940.51 5.3% 5.3% 17.0% 26.5% S&P 500 2,384.20 4.6 5.6 14.5 26.6 18.3x 17.0x Nasdaq Composite 6,047.61 7.2 11.4 25.5 46.5 Russell 2000 1,400.43 2.9 2.6 22.7 24.4 23.8 N/A S&P 500 Health Care Sector 872.26 6.4 7.9 7.6 29.4 Healthcare IT Composite 56.74 6.2% 15.8% 0.5% 3.2% Number Aggr. Equity % of Total % of Aggr. of Mkt. Value Number of Equity Mkt. Median Stock Price Performance Companies ( millions) Companies Value 3 mos. YTD 12 mos. 36 mos. >5bln 3 $50,262 8.6% 51.7% 21.1% 29.9% 94.9% 157.8% 1bln - 5bln 16 39,798 45.7 41.0 10.5 4.4 29.9 41.0 250mm - 1bln 10 6,580 28.6 6.8 4.8 (21.1) 4.1 3.3 <250mm 6 536 17.1 0.6 (1.7) (1.7) 13.1 (35.6) Total / Median 35 $97,176 100.0% 100.0% 7.7% 1.4% 21.5% 22.1% Capitalization Profile Market Indices Sector
15
Embed
Number Aggr. Equity% of Total % of Aggr. Interest Rates ......This report was not issued by our research department. The information ... Company Name As Of 52-Week Market Enterprise
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1
Sources: ThomsonOne, Bloomberg
Disclosure: KeyBanc Capital Markets is a trade name under which corporate and investment banking products and services of KeyCorp and its subsidiaries, KeyBanc Capital Markets Inc., Member
NYSE/FINRA/SIPC, and KeyBank National Association (“KeyBank N.A.”), are marketed. Securities products and services are offered by KeyBanc Capital Markets Inc. and its licensed securities
representatives, who may also be employees of KeyBank N.A. Banking products and services are offered by KeyBank N.A. This report was not issued by our research department. The information
contained in this report has been obtained from sources deemed to be reliable but is not represented to be complete, and it should not be relied upon as such. This report does not purport to be a
complete analysis of any security, issuer, or industry and is not an offer or a solicitation of an offer to buy or sell any securities. This report is prepared for general information purposes only and does
not consider the specific investment objectives, financial situation and particular needs of any individual person or entity.
($ in millions)
Healthcare IT Sector Review: Publicly-Traded Healthcare IT Sector Summary
Number Aggr. Median TEV / Median Price /
of Equity Mkt. Median % Change LTM Multiples Earnings Ratio
Companies Value 3 mos. 12 mos. Revenue EBITDA 2017 2018
2017 YTD Investment Grade issuance is at $492.4bln
309 deals and 598 tranches have priced in 2017 YTD with an average deal size of $1.6bln
– 2016 priced 827 deals with an average size of $1.6bln
Two Investment Grade Healthcare issuers hit the market in April:
– Kaiser Permanente (NR / AA-)
– SSM Health Care Corp (NR / A+)
In April, Investment Grade funds saw $8.9bln of net inflows; 2016 net inflows totaled $53.7bln
Investment Grade spreads tightened by 2 bps during the month, ending April at 141 bps
– Investment Grade Healthcare tightened by 1 bp during the month, ending April at 131 bps
– The 10-yr US Treasury yield ended the month at 2.28%
7
Sources: Morgan Markets, Bloomberg
As of April 30, 2017
Recent High Yield Deals
Recent Investment Grade Deals
Year-to-Date Debt Capital Markets Transactions
None
Amount Rating Issuance
Date Issuer Security ($MM) Moody's S&P Coupon Maturity Price Yield Spread Type Sector
3-Feb-17 Change Healthcare Sr. Notes $1,000 B3 B- 5.750% 15-Feb-25 100.000% 5.750% 336 bp 144A Healthcare IT
Use of Proceeds: Finance the merger of McKesson's Technology Solutions business (MTS) and Change Healthcare Holdings, and to refinance existing debt
8
Source: Loan Connector
New Issue
Loan Market Update: YTD Healthcare IT Pricings
Tranche LIBOR Upfront
Date Company Name Tranche Type Amount Deal Amount Maturity Date Spread Fee Moody's S&P Lead Arranger(s) Use of Proceeds Phase
10-Mar-17 Constellation Health Technologies Term Loan B 160,000,000 175,000,000 30-Jan-22 NA 125 NR NR BAML, BMO, KeyBanc Capital Markets Sponsored Buyout Completed
10-Mar-17 Constellation Health Technologies Revolver/Line >= 1 Yr. 15,000,000 175,000,000 30-Jan-22 NA 125 NR NR BAML, BMO, KeyBanc Capital Markets Sponsored Buyout Completed
1-Mar-17 Change Healthcare Holdings LLC Term Loan B 5,100,000,000 6,835,000,000 1-Mar-24 275 25 Ba3 B+BAML, Barclays, Citigroup, Goldman Sachs, Royal
Bank of Canada, SunTrust BankGeneral Purpose Completed
1-Mar-17 Change Healthcare Holdings LLC Bridge Loan 1,235,000,000 6,835,000,000 1-Mar-18 NA NA NR NA BAML, Goldman Sachs General Purpose Completed
1-Mar-17 Change Healthcare Holdings LLC Revolver/Line >= 1 Yr. 500,000,000 6,835,000,000 1-Mar-22 275 NA NR B+BAML, Barclays, Citigroup, Goldman Sachs, Royal
Bank of Canada, SunTrust BankGeneral Purpose Completed
15-Feb-17 Greenway Health Revolver/Line >= 1 Yr. 30,000,000 560,000,000 15-Feb-22 NA NA B3 NR Jefferies General Purpose Completed
15-Feb-17 Greenway Health Term Loan B 530,000,000 560,000,000 15-Feb-24 475 50 B3 NR Jefferies General Purpose Completed
6-Feb-17 Mediware Information Systems Term Loan B 320,000,000 320,000,000 NA 375 25 B2 B-BAML, Jefferies, Nomura International Plc, Royal
Bank of Canada, SunTrust BankSponsored Buyout Completed
9 9
Sources: Morgan Markets, Bloomberg
As of April 30, 2017
Current Interest Rate Environment
Yield Curve Suggests Continued Low Rate Environment Forward LIBOR Rate
10-yr UST Yield Remains Near All-Time Lows % of Time the 10-yr UST was Below a Specific Yield (1962 – Present)
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
3 Mo 6 Mo 12 Mo 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 30 Yr
Forward Yield Curve - May 31
Yield Curve - April 30
Forward Yield Curve - One Year Forward (4/30/2018)
Date Date Issuer Ticker Value Cap Offered Secondary Range Price Range 1 Day 1 Week 1 Month Healthcare Sector
01/04/16 09/28/16 Tabula Rasa Healthcare Inc TRHC $51.6 $187.0 4.300 0% 13.00 - 15.00 $12.00 Below 24.0% 12.1% (1.9%) Healthcare IT
05/06/16 06/01/16 NantHealth Inc NH 91.0 1,690.0 6.500 0% 12.50 - 15.50 14.00 In Range 32.8% 12.9% (8.1%) Healthcare IT
4/29/16 5/25/16 Cotiviti Holdings Inc COTV 246.0 1,705.0 12.500 0% 17.00 - 19.00 19.00 In Range 10.0% (0.8%) (0.4%) Healthcare IT
Mean $129.5 $1,194.0 7.767 22.2% 8.0% (3.5%)
Median $91.0 $1,690.0 6.500 24.0% 12.1% (1.9%)
12
Source: Capital IQ, Mergermarket
M&A Activity
($ in millions)
Announced Target Acquiror Target Business Description
4/27/2017 Kali Care, Inc. AptarGroup, Inc.Develops an online platform to connect the patient’s medication with doctors, caregivers, pharmacists,
CROs, university researchers, hospitals and family members in real timeNA
4/27/2017Lightshed Healthcare Technologies
LLC (Clockwise.MD)DocuTAP, Inc. Provides online self-scheduling and queue management solutions for healthcare sector NA
4/25/2017 Source Medical Solutions, Inc. Surgical Information SystemsProvides ambulatory surgery center (ASC) and therapy software, outpatient information solutions and
revenue cycle management services for ASCs, specialty hospitals and rehabilitation clinicsNA
4/24/2017 Oncoverse LLC BTG plcDevelops and operates a digital health care platform which enables health care professionals to
collaborate on cancer patient care decisions and to monitor the progress of patient therapiesNA
4/24/2017 Forecast Health, Inc. Lumeris, Inc. Provides predictive analytics and planning tools to enable population health programs for health systems NA
4/13/2017 CMT, Inc. Relias Learning, LLCProvides evidence-based behavioral health analytics and decision support tools for managed Medicaid
and Medicare organizationsNA
4/18/2017 TypeZero Technologies LLC Cellnovo Limited Offers an Artificial Pancreas (AP) software that monitors blood glucose levels via a smartphone application NA
4/19/2017 Medicalis Corp. Siemens Healthineers, Inc.Provides radiology workflow technology solutions to professional radiology groups, imaging centers,
hospitals and at-risk entitiesNA
4/19/2017 InPharmics Omnicell, Inc.Offers end-to-end medication use process cost analytics and compliance systems for acute care hospital
pharmaciesNA
4/18/2017 ArroHealth CIOX HealthProvides technology-enabled risk adjustment solutions to Medicare Advantage, managed Medicaid and
commercial health plans, as well as for the health insurance exchange marketplaceNA
4/17/2017 Mytrus, Inc. Medidata Solutions, Inc.Provides "virtual clinical trials" and technologies such as electronic informed consent to improve clinical trial
efficiencyNA
4/13/2017EncounterCare Solutions Telehealth
and Chronic Care ManagementiGambit, Inc. Provides Electronic House Call, a remote patient vital signs monitoring device NA
4/12/2017 Entrada, Inc. Quality Systems IncProvides clinical documentation and document sharing solutions, and an iOS software development kit that
integrates provider productivity and care collaboration capabilities within mobile applications$34.0
4/10/2017 LeonardoMD, Inc. Azalea Health Innovations, Inc.Offers Web-based medical practice management software and electronic health record (EHR) to
physicians, medical billing services and medical providers in medical specialtyNA
4/5/2017 Soft Informatique Inc. MediSolution Ltd.Develops and offers electronic medical recordkeeping, medical billing and diagnostic imaging software for
health professionals and their administrative collaboratorsNA
4/5/2017 Advanced Practice Strategies, Inc. Relias Learning, LLC Provides assessment, education and analytics services to clinicians NA
4/4/2017 WPC Healthcare, Inc. Intermedix Corporation Develops, implements and supports data solutions for the healthcare industry NA
4/3/2017Aon Hewitt Inc., Admin Business in
CanadaSmart Employee Benefits Inc. Provides health and welfare benefit administration technology solutions NA
4/4/2017 Connextions, Inc. TeleTech Healthcare Solutions, Inc.Develops and provides a healthcare consumer engagement solutions platform, and also offers various
advisory services including business consulting, process design and systems integration80.0
4/3/2017 ShiftHound, Inc. ABILITY Network Inc. Provides Web based workforce management solutions for small and medium sized customers NA
Enterprise
Value
13
Source: SEC, WSJ, Capital IQ
Private Placements Activity
Date Company Amount Key Investor(s) Target Description
4/25/2017 Science 37 $29.0Amgen Ventures; dRx Capital AG; Glynn Capital Management;
GV; Lux Capital Management; Redmile Group, et. al
Mobile technology and clinical trial company that focuses on the development of
networked patient-centric models for clinical research to accelerate biomedical discovery
4/25/2017 RapidSOS 14.0A3 LABS; Highland Capital Partners; Motorola Solutions Venture
Capital; Responder Ventures, LLC; The Westly Group, et. al
Develops and offers a smartphone application that gives people the ability to call police,
fire, or an ambulance with one touch of the screen and share photos and videos
4/25/2017 HealthVerity 10.0Flare Capital Partners; Foresite Capital Management, LLC;
Greycroft Partners LLC
Develops and offers technologies and software tools for the discovery and integration of
optimal patient data sets
4/20/2017 ZappRx 25.0GV; Qiming Weichuang Venture Capital Management
(Shanghai) Company Limited; SR OneDeveloped an application for prescription management
4/19/2017 Solv Health 6.3 BenchmarkDevelops and operates an online platform that lets users find and book same-day doctor's
appointment
4/18/2017 Murj 4.5 Social Capital Partners; True Ventures Develops digital data collection platform for implantable cardiac devices
4/13/2017 ClearDATA Networks 12.0Excel Venture Management; Flare Capital Partners; Heritage
Group; HLM Venture Partners; Merck Global Health, et. al
Provides a cloud computing platform and information security services to the healthcare
industry in the United States
4/12/2017 Blink Health 90.0 Eight PartnersDevelops a generic and prescription medication purchase platform that focuses on
medication search, advance payment and prescription discounts
4/11/2017 Doc Halo 11.0 Bain Capital Ventures; Refinery VenturesDevelops mobile safety and emergency communication application that enables to
contact emergency dispatchers with one touch on the screen
4/11/2017 Evidation Health 10.0 B Capital Group; GE Ventures; Sanofi-Genzyme BioVenturesDeveloped solutions that allow healthcare companies and their populations to build and
manage relationships and improve outcomes
4/11/2017 Simple Contacts 8.0 Goodwater Capital; Notation CapitalProvides Simple Contacts, a mobile application that helps users to renew their contact lens
Senior Secured Credit Facilities has been acquired by Senior Secured Credit Facilities Senior Secured Credit Facilities has received an investment from