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Digital health industry dominated by acquisitions in 2015, 2016

Mergers and acquisitions are an important area of planning and strategy that every growing business should be prepared for at some point. This is particularly important in industries that are highly competitive and which involve constant innovation. One such area is digital health.

The number of business acquisitions that have occurred in the digital health industry in the last couple years demonstrates the highly competitive nature of the industry. In 2015, MobiHealthNews tracked a total of 36 acquisitions. In 2016, there were a total of 39 acquisitions as well as one merger. 

The fact that there are, by far, more acquisitions in the digital health industry is interesting. An acquisition, of course, is when one company purchases the business of another, typically while retaining its name, business model, and other aspects of operation. A merger involves the combination or fusion of two or more companies to form a new company. Mergers require the companies involved to consolidate into a new business, with new ownership and management.

Both mergers and acquisitions involve their own unique challenges. One theoretical difference between the two is that mergers are friendly and cooperative, while acquisitions are hostile. In reality, the distinction often does not bear out in practice, which is why many experts do not make a hard distinction between the two

Most mergers and acquisitions involve significant challenges. These challenges can involve communications and relations between the companies, as well as challenges with regulators and customer relations. In any merger or acquisition case, it is critical for the businesses involved to work with a experienced legal counsel to navigate disputes and issues that arise.

Source: Investopedia.com, “What is the difference between a merger and an acquisition?,” Feb. 18, 2015. 

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