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Private Equity Health Care Acquisitions – March 2021

In light of the growing investor interest in health care and the risks associated with private equity ownership of health care companies, the Private Equity Stakeholder Project will be tracking private equity-backed health care acquisitions. Below is a list of private equity health care buyouts and add-on acquisitions completed during March 2021. We will continue to track acquisitions on a monthly basis.

See February 2021 acquisitions here.

Epselon – GTCR

Private equity firm GTCR is creating a new platform for health care investments called Epselon Global. Epselon will focus on acquiring health care companies to “build a market-leading healthcare business,” though the specific subsector of health care has not been made public.[i]

GTCR is a prolific health care investor, with at least 11 current health care portfolio companies and almost 50 past investments.[ii] Multiple GTCR health care companies have made headlines for lawsuits alleging cancer-causing emissions, poor medical care, billing fraud, and other issues. GTCR’s checkered history in health care raises questions about how the firm will ensure that Epselon does not run afoul of the law.

Frequent GTCR partners Michael Mulhern and Phil Macnabb will co-invest and lead Epselon. Mulhern and Macnabb have held senior executive roles at multiple GTCR companies, including Sterigenics (aka Sotera Health).[iii]

Sterigenics is a medical device sterilization company. In the last two years it has been sued over 800 times for emitting ethylene oxide, a cancer-causing gas, in excess of permissible limits. Most recently, the New Mexico Attorney General filed suit in January this year.[iv] 

GTCR has owned Sterigenics since 2011. Warburg Pincus recapitalized the company in 2015, becoming the majority owner with GTCR staying on with a minority stake.[v]

Ethylene oxide has long been on the federal list of carcinogens, but in 2016 the EPA released conclusive evidence linking the gas to breast cancer, leukemia and lymphomas at extremely low levels of exposure, and reclassified it as a “known” carcinogen.[vi] Beginning in October 2016, the Warburg Pincus and GTCR-led ownership group began taking debt-financed dividends from Sterigenics totaling approximately $1.17 billion.[vii]

Some of the pending lawsuits against Sterigenics allege that Sterigenics’ owners intentionally began moving money out of the company through the dividend recapitalizations in order to insulate their capital from potential lawsuits related to the emissions.[viii]

Warburg Pincus and GTCR took Sterigenics public in November 2020 but have retained a controlling stake in the company.[ix] 

GTCR also previously owned Correct Care Solutions (CCS), a health care company operating in prisons and detention centers.[x] CCS, which is now known as Wellpath, has been sued at least 1,395 times in federal courts for a range of allegations including wrongful death, malpractice and inadequate medical care.[xi]

Curo Health Services, a home health and hospice company that GTCR formed in 2010, [xii] has also faced legal trouble. In 2017, Curo paid a $12.2 million settlement to the US Department of Justice for allegedly engaging in illegal kickback schemes during GTCR’s ownership.[xiii]

Genesis HealthCare – Pinta Capital Partners

Nursing home giant Genesis HealthCare has voluntarily delisted from the New York Stock Exchange after receiving a $50 million cash infusion from private equity-owned ReGen Healthcare.[xiv] Genesis operates more than 325 nursing homes and assisted-living centers in 24 states.[xv]

ReGen is owned by private equity firm Pinta Capital Partners. The investment gives Pinta a 25% ownership stake with options to increase its share to 43% by April 15. Pinta has appointed two new directors to the Genesis’s board including David Harrington, a founding principal at Pinta.[xvi]

Pinta’s investment in Genesis comes at a time when private equity ownership of nursing homes faces pronounced scrutiny. New research has shown that private equity-owned nursing homes have higher mortality rates and declines in patient wellbeing.[xvii]

Following Genesis’s announcement, Sen. Elizabeth Warren wrote a letter to Genesis raising concern about the transaction and highlighting large payouts made to its now-departed CEO despite declining financial condition.[xviii]

March2021 Private Equity Health Care Acquisitions:

Buyouts

Company NamePE FirmType
The Eye Health Group Beverly Capital Eye care
Ginger Blackstone Group (growth equity) Behavioral health
Renalogic Carrick Capital Partners Renal risk management services
ViaQuest Council Capital Behavioral health
ECLAT Health Solutions Gulf Capital Revenue Cycle Management
Hansei Solutions Gulf Capital Revenue Cycle Management
Cordis (of Cardinal Health) Hellman & Friedman Medical Devices
Cherry Tree Dental ICV Partners Dental services
Refac Optical Group Lincoln Road Advisors Eye care
Advent Home Medical New Harbor Capital Medical supplies
NDC Platinum Equity Health care supply chain
Regent Surgical Health TowerBrook Capital Partners, Ascension Ambulatory surgery centers
It’s Never 2 Late Vista Equity Partners (growth equity) Elder care
HealthPRO Heritage Wellspring Capital Management Contract therapy for SNFs, home health
FoodScience Wind Point Partners Nutritional supplements

Add-on Acquisitions

Company NamePE FirmAcquiring EntityType
A Step Ahead Autism Solutions ABRY Partners Lighthouse Autism Cente Behavioral health
American Preclinical Services ArchiMed and Ares Capital North American Science Associates CRO
Bio-Optronics Ares Capital, Audax Group, Genstar Capital and Linden Capital Partners Advarra Health tech
Advantage Medical (California) Ares Private Equity Group Convergint Technologies Health care security tech
MAXhealth Arsenal Capital Partners Best Value Healthcare Primary care centers
Digestive Disease Associates Audax Group Gastro Health Gastroenterology
BlueMed Medical Supplies Audax Group Aspen Surgical Products Medical supplies
Reign Dental Blue Sea Capital DECA Dental Group Dental services
Harbor Psychologist Centerbridge Partners Community Psychiatry Management Behavioral health
BTG Specialty Pharmaceuticals Charterhouse Capital Partners, Mérieux Equity Partners and Partners Group SERB Pharmaceuticals
ViruDefense Clearlake Capital Group Team Technologies Medical supplies
PatientPing Clearlake Capital Group Apriss Health tech
himagine solutions Everstone Capital, Goldman Sachs Merchant Banking Division Omega Healthcare Management Services Healthcare outsourcing services
EBS Healthcare Five Arrows Capital Partners The Stepping Stones Group Behavioral health
Performance Therapy Center Great Point Partner Spine & Sport Physical Therapy Physical therapy
Total Body Rehab: Orthopedic and Hand Therapy Gryphon Investors, Harris Preston & Partners Physical Rehabilitation Network Physical therapy
Three ATI Physical Therapy clinics in CA Harris Preston & Partners, Gryphon Investors Physical Rehabilitation Network Physical therapy
Vitaldyne Medical Inverness Graham Catheter & Medical Design Medical supplies
Wine Country Occupational Medicine Kain Capital Akeso Medical Holdings Occupational medicine
Outcome Health L Catterton, Searchlight Capital Partners and Silver Point Capital PatientPoint Health tech
Associated Urological Specialists Lee Equity Partners Solaris Health Urology
CE Resources, Inc Leichtman Capital Partners Therapeutic Research Center Medical education
CompuClaim Level Equity, Radian Capital Lock8 Partners Health tech
Pinellas Cancer Center M33 Growth, Havencrest Capital Management, ROCA Partners The Oncology Institute of Hope and Innovation Oncology
Advanced Plan For Health Marlin Equity Partners Virgin Pulse Health tech
Sandcastle Centers MBF Healthcare Partners Acorn Health Behavioral health
Kamana McCarthy Capital Triage Staffing Staffing tech
Downtown Women’s Health Care NaviMed Capital Velocity Clinical Research Women’s health
Diamond Pharma Services Odyssey Investment Partners ProPharma Group Pharmaceuticals
Dunn Regulatory Associates Onex, TowerBrook Capital Partners Acacium Group Health care consulting
Everwell Specialty Pharmacy Osceola Capital Revelation Pharma Corp Pharmaceuticals
Cobius Healthcare Solutions Parthenon Capital Partners MRO Health tech
Archetype Innovations Revelstoke Capital Partners Carrus Health tech
Honeybee Health Rosewood Private Investments INW Innovations in Nutrition + Wellness Health tech
180 Health Partners Sunwater Capital, Equality Asset Management Mindoula Behavioral health
Harlingen Family Dentistry Surge Private Equity Access Dental Management Dental services
Allen’s PharmaServ Sverica Capital Management Procare Ltc Pharmacy services
Casamba The Carlyle Group, Level Equity and Silversmith Capital Partners Net Health Health tech
NBN Infusions The Halifax Group PromptCare Home health
iTakeControl The Riverside Company Red Nucleus Solutions Health tech
PROHealth Home Care The Riverside Company Best Life Brands Senior care
Alliance Home Health Care & Hospice Care Vistria Group Mission Healthcare Home health
Austin Gastroenterology Waud Capital Partners Texas Digestive Disease Consultants Gastroenterology
Children’s Center For Growth and Development Waud Capital Partners Ivy Rehab Behavioral health
Digestive Health Specialists PA Webster Equity Partners One GI Gastroenterology
Dayton Gastroenterology Webster Equity Partners One GI Gastroenterology
Partners in Drug Abuse Rehabilitation Counseling Webster Equity Partners, BPEA Private Equity BayMark Health Services Behavioral health

[i]https://www.prnewswire.com/news-releases/gtcr-announces-healthcare-partnership-with-michael-mulhern-and-phil-macnabb-to-form-epselon-global-301240973.html

[ii]https://www.gtcr.com/investments/healthcare/

[iii]https://www.prnewswire.com/news-releases/gtcr-announces-healthcare-partnership-with-michael-mulhern-and-phil-macnabb-to-form-epselon-global-301240973.html

[iv]https://www.medtechdive.com/news/new-mexico-sues-sterigenics-over-ethylene-oxide-emissions/592953/

[v] “Sterigenics International Announces Recapitalization With Warburg Pincus And GTCR,” Press release by Sterigenics, March 2015. https://sterigenics.com/sterigenics-announces-recapitalization-with-warburg-pincus-gtcr/

[vi] United States Environmental Protection Agency, Ethylene oxide, accessed September 2020. https://cfpub.epa.gov/ncea/iris2/chemicalLanding.cfm?substance_nmbr=1025

[vii] For the complete calculation of dividends at Sterigenics, see our report: “Dividend Recapitalizations in Health Care: How Private Equity Raids Critical Health Care Infrastructure for Short Term Profit.”

[viii] Jonathan Bilyk, “EtO plaintiffs: Even before 1st lawsuit filed, Sterigenics moved to put $1.3B ‘out of reach’ of personal injury lawsuits,” Cook County Record, February 4, 2020. https://cookcountyrecord.com/stories/524626117-eto-plaintiffs-even-before-1st-lawsuit-filed-sterigenics-moved-to-put-1-3b-out-of-reach-of-personal-injury-lawsuits

[ix]https://investors.soterahealth.com/node/7231/html

[x]https://www.gtcr.com/investments/past-investments/#healthcare

[xi]https://www.yahoo.com/lifestyle/leading-profit-prison-immigration-detention-medical-company-sued-least-1395-times-100026407.html

[xii]https://www.reuters.com/article/us-gtcr-curohealth/gtcr-looking-to-sell-u-s-hospice-firm-curo-health-services-sources-idUSKBN0GC20420140812

[xiii]https://www.justice.gov/usao-ndtx/pr/hospice-companies-pay-122-million-settle-kickback-claims

[xiv]https://skillednursingnews.com/2021/03/nursing-home-giant-genesis-to-restructure-voluntarily-delist-from-nyse/

[xv]https://www.nytimes.com/live/2021/03/04/business/stock-market-today/a-struggling-nursing-home-giant-effectively-goes-private-after-a-cash-infusion

[xvi]https://skillednursingnews.com/2021/03/nursing-home-giant-genesis-to-restructure-voluntarily-delist-from-nyse/

[xvii]https://bfi.uchicago.edu/working-paper/does-private-equity-investment-in-healthcare-benefit-patients-evidence-from-nursing-homes/

[xviii]https://www.warren.senate.gov/imo/media/doc/2021.03.16%20Letter%20Response%20to%20Genesis%20Healthcare%20re%20Executive%20Pay%20and%20CARES%20Act%20Funding%20(2).pdf

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