A "perfect storm" of tech giants, rapidly evolving technology and societal changes are driving intense innovation and mergers and acquisitions (M&A) in the healthtech sector, according to a new report.
A wave of disclosed deals worth nearly $9.5bn (£6.8bn) in the second half of last year was led by North America, both in terms of the acquirers and the targets, according to data from tech-focused corporate finance advisers Hampleton Partners.
Yet the UK remained head and shoulders above the rest of Europe, attracting more North American cash than any other European country. It even managed to get one deal into the top ten, as London-headquartered private equity house Montagu bought Servelec Group for $296m.
“This vast healthtech sector where patient care systems have remained largely unchanged for decades is experiencing a seismic shift in funding and technology innovation," said Hampleton's Jonathan Simnett.
"The customer care and logistics expertise that comes with Amazon’s market-moving plan to offer healthcare services is an indication of just how big this shift is going to be."
Earlier this month, Amazon announced it was joining forces with JP Morgan and Berkshire Hathaway to form a new-style healthcare company for employees.
The largest deal in the sector last year was Express Scripts' $3.6bn acquisition of health benefit and claims management firm Evicore, while KKR-backed Internet Brands' $2.8bn approach for symptom site WebMD pulled in second.
According to Hampleton, deals will be driven by the ongoing "digitalisation" of healthcare, an increased focus on data and analytics to increase efficiency and help track health risks, and a rise in the popularity of medical benefit management amid an "evolving" political landscape and policy changes.
Also the creeping involvement of tech firms such as Amazon, Apple and Google, which have access to consumers, devices, data and vast resources, will drive change even in a highly regulated market.