/12 top digital-health bankers break down the trends driving M&A

12 top digital-health bankers break down the trends driving M&A

Bank of America’s Justin Walter said there was an opportunity to create a better data solution for the whole care journey as more people are treated from home.

Justin Walter wearing a blue button-down shirt in front of a bush with green leaves.

Justin Walter is the head of Bank of America’s healthcare-services investment banking.

Bank of America

Notable deals: Bank of America just advised MDLive, a telehealth company, in its sale to the insurer Cigna’s Evernorth. Earlier this year, it advised on Alignment’s IPO.

Walter has been with the same firm for his whole career.

He joined Merrill Lynch in wealth management and then healthcare banking before its acquisition by Bank of America in 2009.

Walter, now the head of healthcare-services investment banking, said many of his clients in digital health were evaluating the IPO route, versus getting acquired.

Meanwhile, the big consolidators, from health plans to large tech companies, are getting more comfortable with the idea that some digital-health companies’ multiples are well worth it.

Health plans are taking on more care-delivery services while providers take on more risk — usually health plans’ turf — with value-based care arrangements.

This will continue to fuel deals, he said.

The coronavirus pandemic also accelerated care’s movement into the home, since hospitals are expensive, Walter said.

Now there’s an opportunity to use remote monitoring and other technology to keep up with patients’ complete care journey, especially for those with chronic conditions, whether they’re at home, in the hospital, or at the doctor’s office, he said.

“There hasn’t been an established, turnkey solution,” Walter said.

Despite the consolidation pressure, Walter said, niche offerings that can plug various holes in this ecosystem can still be successful.

Some companies aren’t even making money but enjoy investors’ backing because, among other things, they believe in their vision of fixing healthcare, Walter said.

Home testing, for example, can cut costs and help people identify diseases sooner, he said.

Walter said he was optimistic that the solutions out there would help change the healthcare system’s cost infrastructure.

“It’s just taking longer to get there than I think anybody thought,” Walter added.

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