Dive Brief:
- The wellness industry M&A trend continues to gain ground, mainly because large players are looking to add solutions to build their global footprint. But even with that trend, innovative start-ups offering "unique services" also have a place in the sector, according to Employee Benefits News.
- The article cites the Stay Well Health Management and Krames StayWell merger, and Interactive Health acquiring Health Solutions as the start of the trend in 2014. It also mentioned the 2016 Virgin Pulse consolidation with ShapeUp and the Global Corporate Challenge.
- Experts quoted by EBN warn that wellness industry mergers, as with any M&A deal, can be a double-edged sword for the companies merging and employer clients as well.
Dive Insight:
Workplace wellness' growing popularity is not surprising, as employers who invest in their employees’ well-being are seeing several upsides including health outcomes and measurable ROI. The EBN article mentions a white paper published in the Journal of Occupational and Environmental Medicine which found that 45 publicly traded companies earning top employee health and wellness scorecard results over a six-year period also outperformed the 500 largest U.S. companies listed on the S&P 500 index by 235%.
Howard Kraft, a Mercer partner and North American total health management specialty practice leader, told EBN that employers who find their wellness providers entering an M&A deal should focus on the integration details of the relevant vendors, using detailed "short and long-term change management roadmaps, technology platforms and people and product portfolios."
LuAnn Heinen, vice president of the National Business Group on Health, says managing multiple wellness vendors is a major challenge for employers, so if an M&A deal creates more services and they streamlined on a single platform, it can be a benefit. “However, it doesn’t always work that way in practice,” she told EBN.