Private Equity Health Care Acquisitions – April 2023

In light of the growing investor interest in healthcare and the risks associated with private equity ownership of healthcare companies, the Private Equity Stakeholder Project is tracking private equity-backed healthcare acquisitions. Below is a list of private equity healthcare buyouts, growth investments, and add-on acquisitions completed or announced during April 2023. We will continue to track acquisitions on a monthly basis.

See March 2023 acquisitions here.

See all our 2022 acquisitions updates here.

We tracked 34 add-on acquisitions, 4 buyouts, and 11 growth/expansion investments in April, for a total of 49 private equity deals.

Continued expansion in dental care
The dental care sector saw 5 add-on deals in April between three platform companies. Private equity firms operate through dental services organizations (DSOs), which provide non-clinical business services to dental practices (such as billing and marketing). In July 2021, PESP reported how, “Both the DSO and physician practice management industries appear to have been created, largely by private equity firms, to avoid regulation that prohibits investor ownership of clinical practices.”[1]

Critics have also claimed that private equity’s expansion into the dental care sector exacerbates pressure on doctors to increase profits and increased the uncertainty of diminished the doctor/patient relationships for the benefit of private equity investors and their interests.[2]

Smile Doctors made three acquisitions in April, continuing several months of activity by the company. Through mid-April, Smile Doctors had already acquired 21 clinics in 2023. The company operates more than 390 locations in 28 states.[3] Smile Doctors has been private equity-owned since December 2021, when private equity firms Thomas H. Lee Partners and Linden Capital Partners became equal investors in the chain at a $2.4 billion valuation.[4]

Dental add-ons also included Dental Care Alliance’s acquisition of Austell Dental Associates. Dental Care Alliance is owned by Mubadala Investment Company and Harvest Capital Partners. In May 2022, Harvest sold a 50% stake in the company to Abu Dhabi’s Mubadala at a valuation close to $2 billion.[5] In August 2022, Dental Care Alliance paid $3 million to settle a class action lawsuit filed in response to a data breach affecting more than 1.7 million Dental Care Alliance patients.[6]

Private equity-owned Image Specialty Partners bought Castilla Orthodontics in April. Castilla was established in Salem, Oregon, in 2013. Image Specialty Partners is a dental service organization with approximately 30 locations in the western U.S. Private equity firm ONCAP acquired a majority interest in the company in June 2022.[7]

PE continues its incursion into cardiovascular care
Private equity platform companies acquired at least three cardiology companies in April. In February 2023, MedPage Today described private equity’s “new love for cardiology.”[8] The sector is attractive for its size: Heart disease is the leading cause of death in the U.S. and costs more than $200 billion per year in healthcare and lost productivity.[9]

Cardiovascular Associates of America acquired add-on companies Novocardia and the Cardiac and Vascular Institute in April.[10] Cardiovascular Associates is owned by two private equity firms: MedEquity Capital[11] and Webster Equity Partners.[12] Webster established the company as an acquisition platform in December 2021.[13]

Cardiovascular Logistics is another private equity-established cardiology platform. Lee Equity Partners established the company in February 2023.[14] In April, Cardiovascular Logistics acquired First Coast Cardiovascular Institute, a 38-practice provider operating in Florida and Georgia since 2002.[15]

During one session at the 2022 American Medical Association Annual Meeting, an AMA member described private equity’s ownership of physician practices as doing “quite the opposite” what’s desirable: That is, private equity does not encourage building long-term relationships and investments to improve medical practices.[16]

PE buys a correctional healthcare company
One of the few April buyouts was private equity firm Full Guard Capital’s acquisition of Comprehensive Correctional Care. The company provides healthcare services for county correctional facilities in Kentucky.[17] Full Guard Capital also owns IMS Correctional Healthcare,[18] which provides services in North Carolina.[19]

In November 2022, PESP published a report identifying concerns over private equity ownership of correctional healthcare providers, focusing in particular on H.I.G. Capital-owned company Wellpath. The report identified concerns at Wellpath including inadequate access to care, poor intake and screening, and understaffing.[20]

April 2023 Buyouts

April 2023 Add-on Acquisitions

April 2023 Growth/Expansion Investments

[1] Eileen O’Grady. “Deceptive Marketing, Medicaid Fraud, and Unnecessary Root Canals on Babies: Private Equity Drills into the Dental Care Industry.” Private Equity Stakeholder Project, July 2021. https://pestakeholder.org/wp-content/uploads/2021/08/PESP_DSO_July2021.pdf.

[2] Ariana Portalatin. “Is Private Equity Hurting or Benefiting Dentistry? 10 Dentists Weigh In.” Becker’s Dental + DSO Review, September 9, 2022. https://www.beckersdental.com/dentists/39305-is-private-equity-hurting-or-benefiting-dentistry-10-dentists-weigh-in.html.

[3] Smile Doctors. “Smile Doctors Marks Q1 2023 with Double-Digit Clinic Growth and Entry into Arizona.” Cision PR Newswire, April 18, 2023. https://www.prnewswire.com/news-releases/smile-doctors-marks-q1-2023-with-double-digit-clinic-growth-and-entry-into-arizona-301799703.html.

[4] Sarah Pringle. “Scoop: THL Buys into Smile Doctors at $2.4 Billion Valuation.” Axios, December 23, 2021. https://www.axios.com/2021/12/23/thl-investment-kicks-off-smile-doctors-deal.

[5] Sarah Pringle. “Mubadala Buys Stake in Harvest’s DCA.” Axios, May 12, 2022. https://www.axios.com/pro/health-tech-deals/2022/05/12/harvest-dental-care-alliance-mubadala-dca-continuation-fund.

[6] HIPAA Journal. “Dental Care Alliance Settles Class Action Data Breach Lawsuit for $3 Million,” August 4, 2022. https://www.hipaajournal.com/dental-care-alliance-settles-class-action-data-breach-lawsuit-for-3-million/.

[7] ONCAP. “Image Specialty Partners.” Accessed May 12, 2023. https://www.oncap.com/operating-companies/operating-companies/ideal-dental.html.

[8] Nicole Lou. “Private Equity Has New Love for Cardiology. Should Doctors Take the Deal?” MedPage Today, February 16, 2023. https://www.medpagetoday.com/special-reports/exclusives/103144.

[9] Centers for Disease Control and Prevention. “Heart Disease Facts | Cdc.Gov,” October 14, 2022. https://www.cdc.gov/heartdisease/facts.htm.

[10] EIN Presswire. “Cardiovascular Associates of America Expands Reach in Florida with Acquisition of The Cardiac and Vascular Institute.” WHO13 Des Moines, April 27, 2023. https://who13.com/business/press-releases/ein-presswire/630422104/cardiovascular-associates-of-america-expands-reach-in-florida-with-acquisition-of-the-cardiac-and-vascular-institute/.

[11] MedEquity Capital. “Cardiovascular Associates of America.” Accessed May 12, 2023. https://medequity.com/portfolio/cardiovascular-associates-of-america/.

[12] Riz Hatton. “6 Cardiovascular Platforms’ Private Equity Partners.” Becker’s ASC Review, April 24, 2023. https://www.beckersasc.com/cardiology/6-cardiovascular-platforms-private-equity-partners.html.

[13] Healthcare Dive. “Cardiovascular Associates of America Launches with Leading Partner Cardiovascular Medicine of Quad Cities,” December 14, 2021. https://www.healthcaredive.com/press-release/20211213-cardiovascular-associates-of-america-launches-with-leading-partner-cardiov/.

[14] Iris Dorbian. “Lee Equity Partners and CIS Form New Platform Cardiovascular Logistics.” Content. PE Hub, February 1, 2023. https://www.pehub.com/lee-equity-partners-and-cis-form-new-platform-cardiovascular-logistics/.

[15] Business Wire. “First Coast Cardiovascular Institute Announces Partnership With Cardiovascular Logistics,” April 24, 2023. https://www.businesswire.com/news/home/20230420005997/en/First-Coast-Cardiovascular-Institute-Announces-Partnership-With-Cardiovascular-Logistics.

[16] Andis Robeznieks. “Physicians Warned of the Pitfalls behind Private Equity Promises.” American Medical Association, August 1, 2022. https://www.ama-assn.org/practice-management/private-practices/physicians-warned-pitfalls-behind-private-equity-promises.

[17] Full Guard Capital. “Full Guard Capital Partners with Comprehensive Correctional Care – Full Guard Capital,” April 21, 2023. https://fullguardcapital.com/full-guard-capital-partners-with-comprehensive-correctional-care/, https://fullguardcapital.com/full-guard-capital-partners-with-comprehensive-correctional-care/.

[18] Full Guard Capital. “Full Guard Capital Partners With IMS Correctional Healthcare,” July 31, 2020. https://fullguardcapital.com/lancer-capital-partners-with-ims-correctional-healthcare/.

[19] IMS Correctional Care. “Services | IMS Correctional Healthcare.” Accessed May 12, 2023. https://imscorrectional.com/services/.

[20] Michael Fenne. “Private Equity Firms Rebrand Prison Healthcare Companies, But Care Issues Continue.” Private Equity Stakeholder Project, November 15, 2022. https://pestakeholder.org/reports/private-equity-firms-rebrand-prison-healthcare-companies-but-care-issues-continue/.