Private Equity Health Care Acquisitions – August 2022
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 will be tracking private equity-backed healthcare acquisitions. Below is a list of private equity healthcare buyouts and add-on acquisitions completed or announced during August 2022. We will continue to track acquisitions on a monthly basis.
See July 2022 acquisitions here.
Apollo Global Management Acquires Psychiatric Hospitals and Gastroenterology Chain
This month, private equity firm Apollo Global Management made two major acquisitions: Springstone, a chain of behavioral health hospitals, and GI Alliance, the largest gastroenterology practice in the US.
Apollo-Owned LifePoint Health Acquiring Behavioral Health Chain Springstone
Apollo-owned rural hospital system LifePoint Health is acquiring psychiatric hospital chain Springstone. The acquisition continues Apollo’s streak in buying up and combining large providers into the LifePoint platform.
Springstone operates 18 behavioral health hospitals and 35 outpatient locations in nine states: Arizona, Colorado, Indiana, Kansas, North Carolina, Ohio, Oklahoma, Texas, and Washington.
Springstone is currently owned by healthcare REIT Medical Properties Trust (MPT), which will continue to own and lease the real estate to the hospitals. MPT had acquired Springstone from private equity firm Welsh, Carson, Anderson, & Stowe (WCAS) in June 2021 and separated out the real estate from the operating business. WCAS created Springstone in 2010 as a single newly constructed psychiatric hospital and has constructed each new facility since.
This is not the first time LifePoint and MPT have partnered; in November 2019, LifePoint executed a sale-leaseback transaction with MPT, selling 10 acute care hospitals to the REIT for $700 million and leasing them back.
The acquisition is a significant expansion of LifePoint’s behavioral health services, which currently includes 30 behavioral health units in various community hospitals and three inpatient behavioral health facilities in Texas and Washington.
LifePoint has grown substantially since Apollo acquired it in 2018 and merged it with another hospital chain, RegionalCare Hospital Partners. Then in December 2021, Apollo acquired acute care hospital chain Kindred Healthcare and merged it with LifePoint. As part of the transaction, LifePoint shifted some of the acquired facilities and some its existing hospitals into a new company called ScionHealth, which is also controlled by Apollo.
See PESP’s previous research on LifePoint:
- Private Equity Firms Reap Payouts After Hospital Chain Received $1.6 Billion in CARES Act Support (September 2021)
- Apollo Global Management Completes Merger of Kindred Healthcare and LifePoint Health, Shifts Some Hospitals to New Company (January 2022)
“Independent hospital systems have greater difficulty weathering prolonged periods of financial stress,’’ Apollo wrote to its investors in May 2020. “A consolidation strategy will provide meaningful upside for Apollo funds’ investment.’’
With LifePoint and Scion together, Apollo owns over 140 hospitals and 170 outpatient and post-acute facilities. The acquisition of Springstone adds another 18 behavioral health hospitals and 35 outpatient locations.
LifePoint’s building out its behavioral health offerings echoes a broader trend of private equity increasingly investing in the sector. PESP has found that private equity has a troubling track record in investing in behavioral health where cost-cutting tactics at such as cutting staff, relying on unlicensed staff, and failing to maintain facilities, have been shown to create harmful outcomes for patients.
See our reports on private equity in behavioral health:
- The Kids Are Not Alright: How Private Equity Profits Off of Behavioral Health Services for Vulnerable and At-Risk Youth (Feb 2022)
- Understaffed, Unlicensed, and Untrained: Behavioral Health Under Private Equity (September 2020)
Apollo Acquiring Major Gastroenterology Provider GI Alliance
Apollo also announced in August that it is acquiring a majority stake in GI Alliance, the largest gastroenterology practice in the US, for $785 million. A group of physicians will buy back the remaining 30% minority stake in the company from Waud Capital Partners. GI Alliance employs roughly 700 physicians in 15 states.
This is part of a trend of private equity is increasingly making investments in the broader digestive health market. According to a 2021 report by Physician Growth Partners, nearly 10% of the 14,000 gastroenterologists in the United States were partners or employed by a private-equity-owned company.
When GI Alliance made several add-on acquisitions of smaller GI practices while still under Waud Capital’s ownership, PESP noted that several forces may be driving private equity investment in the sector:
“An aging population means more people are getting colonoscopies to screen for colorectal cancer, and for patients age 65 and older these screenings are covered entirely by Medicare. In 2021 the CDC lowered the recommended age for colorectal cancer screening from age 50 to 45, in part due to increasing incidence of early-onset colorectal cancer in younger adults.
These factors have increased demand for gastroenterology services, aggravating a shortage of gastroenterology providers. The Health Resources and Services Administration (HRSA) estimates that by 2025, the US will face a shortage of more than 1,600 gastroenterologists nationwide.
Finally, the gastroenterology industry has historically been fragmented, creating opportunities for private equity firms to use platform companies to buy up and consolidate providers, as Waud Capital has done over the four years since it acquired GIA.”
August 2022 Buyouts
|Texas Digestive Disease Consultants||Gastroenterology||Apollo Global Management|
|Wellspring Pharmaceutical||Pharmaceutical||Avista Capital Partners|
|ClaimLogiq||Enterprise systems||Eir Partners|
|Radius Health||Pharmaceutical||Gurnet Point Capital and Patient Square Capital|
|Northwest Specialty Hospital||Hospital||Hammes Partners|
|C2 Healthcare Solutions||Healthcare consulting||Impact Capital Advisors|
|Montgomery DME||Medical equipment||Incline Equity Partners|
|Aspirion Health Resources||Revenue cycle management||Linden Capital Partners and Varsity Healthcare Partners|
|Stealth BioTherapeutics||Biotech||Morningside Group|
|Sannova Analytical||Biopharmaceutical||SFW Capital Partners|
|Panacea Healthcare Solutions||Revenue cycle management||The Firmament Group, Columbia Pacific Capital Partners|
August 2022 Add-On Acquisitions
|Company||Type||PE Firm||Add-on Platform|
|Ciox Health||Medical records systems||22C Capital, Norwest Venture Partners||Target RWE|
|ToothFairy Technologies||Dental||Accel-KKR||Cloud 9 Software|
|American Techlab||Biotech||Adelis Equity Partners||SSI Diagnostica|
|Springstone||Behavioral health||Apollo Global Management||LifePoint Health|
|QSIDental||Dental||Aquiline Capital Partners, Level Equity||Planet DDS|
|PenRad Technologies||Radiology||Ardan Equity, HG Capital (UK), ST6 Partners||Intelerad Medical Systems|
|MedServ Plus||Diagnostic imaging||Atlantic Street Capital||Prestige Medical Imaging|
|XRV Healthcare||Diagnostic imaging||Atlantic Street Capital||Prestige Medical Imaging|
|Heartland Medical Sales & Services||Medical equipment||Atlantic Street Capital||Prescott’s|
|Jordan-Young Institute||Orthopedics||Atlantic Street Capital, Capital Southwest BDC||OrthoBethesda|
|PrescribeWellness||Enterprise systems||BlackRock, GTCR||Transaction Data Systems|
|Diameter Health||Medical records systems||Blue Cross and Blue Shield of Florida, Novo Holdings and Prettybrook Partners||Availity|
|North Central Instruments||Medical equipment||Broad Sky Partners||Thomas Scientific|
|MKCM National Case Management||Workers’ compensation||Centre Partners||The IMA Group|
|OneSource Regulatory||Regulatory services||Churchill Asset Management, Crescent Capital Group, Odyssey Investment Partners||ProPharma Group|
|VIE Healthcare||Healthcare consulting||Churchill Asset Management, Morgan Stanley Capital Partners, Sheridan Capital Partners, Varagon Capital Partners||SpendMend|
|Tapemark||Pharmaceutical||dievini||LTS Lohmann Therapie-Systeme|
|Medliminal||Enterprise systems, revenue cycle management||Eir Partners||ClaimLogiq|
|Bienville Orthopaedic Specialists||Orthopedics||FFL Partners, Thurston Group||Mississippi Sports Medicine and Orthopaedic Center|
|Trulla||Pharmacy services||Fidus Investment BDC, Morgan Stanley Capital Partners, Sheridan Capital Partners||SpendMend|
|Freedom Medical||Medical equipment||Freeman Spogli, Owner Resource Group||US Med-Equip|
|Lykan Bioscience||Pharmaceutical||GHO Capital, Pleasant Bay Capital Partners||RoslinCT|
|CORE Analytics||Enterprise systems||GI Partners, TA Associates Management||Netsmart Technologies|
|Fort Worth Physical Therapy||Physical therapy||Grant Avenue Capital||H2 Health|
|Cura Revenue Cycle Management||Revenue cycle management||GrowthCurve Capital, Northleaf Capital Partners, Riverside Partners||Revecore|
|Kemberton Healthcare Services||Revenue cycle management||GrowthCurve Capital, Northleaf Capital Partners, Riverside Partners||Revecore|
|Dill Family Dentistry||Dental||Lead Capital Partners||Ladd Dental Group|
|TME BCN||Cancer research||Linden Capital Partners||Aptitude Health|
|Stratasan||Enterprise systems||Madison Dearborn Partners, Thoma Bravo||Syntellis Performance Solutions|
|Seidenberg Protzko Eye Associates||Eye care||Quad-C Management||NJRetina|
|Dana Point Endodontics||Dental||Quad-C Management||U.S. Endodontics Partners|
|Bruce Freund||Dental||Regal Healthcare Capital Partners, The Jordan Company||Dental365|
|National Home Healthcare||Home health||Searchlight Capital Partners||Care Advantage|
|Competitive Health||Benefits management||The Cambria Group||Recuro Health|
|Holliday & Associates||Revenue cycle management||The Firmament Group||Panacea Healthcare Solutions|
|Southeast Psych||Behavioral health||Thurston Group||ARC Psychiatry|
|Payer Compass||Health tech||Twin Bridge Capital Partners, Edison Partners, Bain Capital Ventures, Bain Capital, Parthenon Capital Partners and BPEA Private Equity||Zelis Healthcare|
|MiraMed Global Services||Revenue cycle management||Veritas Capital||Coronis Health|
|Austin Retina Associates||Eye care||Webster Equity Partners||Retina Consultants of America|
|Focus Forward Skilled Care||Home health (pediatric)||Webster Equity Partners||Sonas Home Health Care|
|Center for Reproductive Care||Reproductive health||Webster Equity Partners||Pinnacle Fertility|
|Health eFilings||Enterprise systems||WestView Capital Partners||Alpha II|
August 2022 PE Growth/Expansion Investments
|Relatient||Health tech||Alpha Leonis Partners|
|PSN Affiliates||Surgical hospitals||BTG Pactual|
|Home Care Experts||Home health||Cane Investment Partners|
|Southern Biomedical||Medical equipment||Copley Equity Partners|
|Care.ai||Health tech||Crescent Cove Advisors|
|Bonafide Medical Group||Enterprise systems, revenue cycle management||CVF Capital Partners and DCA Partners|
|STRIVE||Benefits management||Essex Bay Capital|
|Eye Care Leaders||Eye care||Global Growth|
|NOxy Health Products||Pharmaceutical||La Jolla Holding Co|
|Lab Logistics||Laboratory services||Linden Capital Partners|
|MedGenome||Laboratory services||Novo Holdings, Sofina and Leapfrog Investments|
|Medical Technology Associates||Medical equipment||PNC Riverarch Capital|
 “LifePoint Health Completes Kindred Healthcare Transaction,” December 23, 2021, https://lifepointhealth.net/news/2021/12/23/lifepoint-health-completes-kindred-healthcare-transaction.
 Following the Kindred acquisition and spinoff of ScionHealth, LifePoint has around 65 community hospitals, 30 behavioral health and rehab hospitals and an additional 15 in the works, 170 outpatient and post-acute facilities and 50,000 employees. ScionHealth consists of 79 hospital campuses in 25 states, including Kindred’s 61 long-term acute care hospitals and 18 of LifePoint’s community hospitals and associated health systems.
https://bhw.hrsa.gov/sites/default/files/bureau-health-workforce/data-research/internal-medicine-subspecialty-report.pdf pg. 5.