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August 09, 2016 12:00 AM

Another acquisition in Nashville's hot healthcare IT market

Dave Barkholz
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    HealthStream's recent $48 million purchase of Morrisey Associates is further evidence of a red-hot market for healthcare IT mergers and Nashville as a hub of that activity.

    Publicly traded HealthStream said Chicago-based software company Morrisey's products will help hospitals and healthcare organizations assess the performance and competence of its clinicians and meet regulatory requirements.

    “Ensuring that you have qualified healthcare providers is the first step for all healthcare organizations in delivering quality care to patients—and that's why we are committed to offering the best provider solutions in the healthcare industry,” said HealthStream CEO Robert Frist Jr.

    Nashville-based HealthStream assists healthcare companies with workforce development and training. Terms of the Morrisey acquisition were not disclosed.

    Healthcare IT is leading a venture-capital boom in Nashville, according to a study released Tuesday by the Nashville Health Care Council and Nashville Capital Network.

    Between 2005 and 2015, venture capitalists poured $940 million into emerging Nashville companies, solidifying the region's place as a hub of for-profit healthcare, the study shows.

    The pace of investment in Nashville healthcare IT has quickened in recent years. Investment by venture capitalists in healthcare IT companies has gone from $2 million in 2009 to a peak of $62.5 million in 2014, the study finds.

    IT surpassed healthcare services in 2012, making it the largest category in which investors are putting seed money to develop healthcare companies in Nashville.

    Venture capitalists tend to be early investors in emerging companies that are about to leave the startup phase to commercialize products and services.

    “Early success often increases a company's capital requirements beyond the scope of individual angel investors. Therefore, local venture resources focusing on the early-stage rounds are necessary to maintain a healthy capital continuum,” said Sid Chambless, executive director of the Nashville Capital Network, a network of 130 investors.

    In the second quarter of this year, healthcare IT was the second-most active subsector for mergers and acquisitions among healthcare companies, according to Modern Healthcare data. Medical-device companies tied with IT at 25 deals.

    One of the biggest deals of the quarter was McKesson Corp.'s decision to merge its healthcare IT unit with Change Healthcare of Nashville to create a company with $3.4 billion in combined revenue.

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    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing