Mar 31, 2022 - Economy

Scoop: THL buys Intelligent Medical Objects in $1.5B-plus deal

Illustration of a medical cross inside of a speech bubble.

Illustration: Megan Robinson/Axios

Thomas H. Lee Partners has agreed to acquire health care data enablement company Intelligent Medical Objects, the parties tell Axios exclusively.

Why it matters: Clinical data quality has long been a problem for different health care stakeholders, and the opportunity exists to tackle this problem for providers, life sciences companies, payers and public health entities.

  • “Everyone is sort of dealing with that same messy data pool,” IMO CEO Ann Barnes says. “There is an enormous void in the market now, specifically around this deep understanding of clinical data and how to standardize and normalize it, and how to reach into that big vat of data and pull out very specific use cases.”

Details: The deal marks an exit for Warburg Pincus six years into its investment, valuing the Rosemont, Ill.-based company at north of $1.5 billion, sources say.

  • That equates to a forward valuation multiple of 25x-plus, they say, based on EBITDA of approximately $60 million.
  • Evercore advised IMO, while William Blair worked with THL.

How it works: IMO’s main product, IMO Core, allows doctors to document patient information “in their own language, the way they speak,” Barnes says, rather than in abstract codes or complex clinical terminology.

  • More efficient documentation can minimize clinician burnout, reduce unnecessary care and charges, optimize billing and reimbursement, streamline data management, and ultimately, inform better care.
  • “There’s no data more valuable than the clinical data," says Shahab Vagefi, who joined THL six months ago as a managing director from Martis Capital.

By the numbers: IMO manages more than 5 million clinical terms and maps to all major coding systems.

  • Used by over 740,000 physicians daily, IMO is embedded within every major EHR (electronic health record) and many minor EHRs in both the acute care and ambulatory settings.

“You have this mishmash of different data coming together,” Vagefi says, with IMO acting as “the Switzerland” of patient information tools.

What's next: The investment will propel product development and expand commercial relationships with hospitals and in non-provider markets.

  • M&A will become part of the equation for IMO, which has for the last 30 years been an organic-only growth story.
  • “First and foremost there are potentially some AI tools we can we use,” the CEO says.
  • The company has already has built new workflow products like surgical scheduling, for instance.

The bottom line: Simplifying patient and treatment data can empower stakeholders across the health care ecosystem, and IMO seeks to be the utility that helps all constituents get there.

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This article has been updated with deal and valuation details.

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