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COVID-19’s Impacts on Healthcare M&A

Entire industries have been disrupted by the COVID-19 pandemic, but some of the biggest changes are happening in the Healthcare sector. The world’s largest pharmaceutical companies, in partnership with universities and philanthropic parties, are currently engaged in an intense global competition to develop, test, manufacture and deliver a vaccine in record time.

A byproduct of this heightened activity within an already rapidly evolving industry is a sharp increase in Healthcare M&A. We have recently discovered a thorough and insightful article titled ‘Covid-19 vaccines, tests and treatments spur healthcare M&A’ published in that sheds some light on the biggest trends that are driving Healthcare M&A. 

The Race to Develop a Vaccine & Treatments Spurring Healthcare M&A

A majority of the world’s largest pharmaceutical companies have joined the vaccine race. With giant pharma showing keen interest in partnering with other companies to accelerate the development & testing of vaccine candidates, the possibility of megamergers is becoming increasingly apparent.

Experts estimate that M&A will accelerate in the pharma industry as companies continue to strive for growth and improved efficiencies. 

Increased M&A Activity in the Digital Healthcare Sector

With non-COVID-19 patients preferring to stay clear of hospitals during the pandemic, digital forms of health care such as telemedicine are becoming increasingly popular and the increased M&A activity in the digital healthcare sector is proving this.

PE firms are showing more interest in healthcare targets that are not management-driven, such as telehealth, healthcare IT and home-based health care. The relaxation of regulations allowing telehealth services to be delivered across state lines has also accelerated growth in the sector.  

Hospitals and Physician Practices Taking a Hit but Pricing Pressures Still Driving M&A Deals

Despite being flooded with COVID-19 patients, the majority of hospitals have suffered financially due to the pandemic. The general aversion of the public towards accessing healthcare services for routine appointments or other forms of specialty treatments has drastically impacted most hospitals and physician practices. 

However, pricing pressures are still driving M&A deals in the healthcare services industry. Buyers are using M&A to increase size and scale while reducing costs.

The Importance of Choosing a VDR that’s Compliant with Healthcare Regulations

Companies in the Healthcare industry who are currently planning or gearing up for upcoming financial transactions would benefit greatly by securing their business-critical information and documentation in a virtual data room. The importance of selecting a provider that is HIPAA compliant can not be overemphasized, and not all VDR providers have this designation. There are significant fines that can be imposed on healthcare companies that violate HIPAA compliance whether intentional or unintentional.  

For pharmaceutical and biotech companies that need to share clinical trial information and results as part of an M&A or fundraising activity, choosing a VDR provider that is 21 CFR Part 11 Validation compliant is an added consideration aspect that should not be overlooked.

About Vault Rooms

For more than 14 years, Vault Rooms has been an industry-leading cloud-based virtual data room provider, proudly facilitating tens of thousands of global M&A transactions across a wide range of industries. Business brokers, investment bankers, accountants, attorneys, private equity firms, and banks can safely collect, organize, share and track business-critical documents on the Vault Rooms platform 24/7/365.

About The Author

Karen Perkins is the CEO and Co-Founder of Vault Rooms, Inc. She is a troubleshooter, problem solver, and efficiency expert. Her career experiences have provided a broad foundation of skills that make her uniquely qualified to assist companies with their growth, transition, and operational improvement. She advocates for the use of simple and secure technology tools designed to make work and life easier with the Super S.M.A.R.T. Women platform. Likewise, her company, Vault Rooms, is a technology platform for the simple and secure sharing of business-critical files.