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Private Equity Health Care Acquisitions – December 2020

In light of the growing private equity acquisitions of health care companies and the risks associated with private equity ownership of health care providers, 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 December 2020. We will continue to track acquisitions on a monthly basis.

See November 2020 acquisitions here

Pinnacle GI Partners- H.I.G. Capital

H.I.G. Capital has partnered with the Center for Digestive Health to create Pinnacle GI Partners, a new digestive health investment platform in Michigan.[i]

H.I.G. has been an active acquirer of health care companies lately; in October H.I.G. acquired St. Croix Hospice, a provider of hospice services with 35 branches in six Midwestern states.

H.I.G.’s spate of recent health care acquisitions raise concern given the company’s recent track record with health care companies. For example, H.I.G. is currently facing a Federal lawsuit for billing fraud allegedly committed by its mental health company South Bay Community Services, a subsidiary of Community Intervention Services. The mental health company settled in 2018, but litigation against H.I.G. itself remains ongoing. Private Equity Stakeholder Project has written about the litigation against H.I.G. and its mental health company here.

H.I.G. also owns prison health company Wellpath, one of the largest healthcare companies serving jails, prisons, detentios facilities, and state psychiatric hospitals. Over the last decade Wellpath subsidiaries have been sued over a thousand times for allegations including understaffing and inadequate staff training that lead to negligence and untimely care, in some cases resulting in patient death.[ii]

Midwest Dental – Gryphon Investors

Smile Brands, which is owned by private equity firm Gryphon Investors, has acquired Midwest Dental from private equity firm FFL Partners. Both Smile Brands and Midwest Dental are dental services organizations (DSOs), which provide management services to dental practices.[iii]

Gryphon Investors acquired Smile Brands in August 2016 from another private equity firm.[iv] It is one of the largest DSOs in the U.S., with 420 affiliated locations across 17 states in the U.S. The acquisition of Midwest Dental brings the combined companies’ total employees to 8,000.[v]

Gryphon reportedly tried to sell Smile Brands in late 2019 but struggled to find a buyer as of January 2020.[vi] The year before, Gryphon had completed a dividend recapitalization of Smile Brands, adding $300 million in debt to pay itself a dividend.[vii]

Gryphon’s acquisition of Midwest Dental via Smile Brands represents another step in private equity’s consolidation of the dental services industry. Currently, nine out of the top ten DSOs in the US are owned by private equity firms and investor interest has shown no sign of abating.[viii] In addition to Gryphon Investors’/ Smile Brands’ acquisition of Midwest Dental, December saw two other DSO acquisitions: Allied Dental, owned by Riverside Partners, merged with TriSpan-backed PG Dental Holdings[ix] and Aces Dental was acquired by Absolute Dental Management, backed by Ares Capital and Beecken Petty O’Keefe & Company.[x]

Add-On Acquisitions

CompanyTypePE FirmAcquiring Entity
Abeo Management Revenue cycle management Varsity Healthcare Partners DuvaSawko
Aces Dental Dental services Ares Capital and Beecken Petty O’Keefe & Company Absolute Dental Management
Advanced Physical Therapy Center Physical therapy Audax Group Phoenix Rehabilitation and Health Services
Allied Dental Dental services TriSpan PG Dental Holdings
Apollo Pharmaceuticals Pharmaceuticals ArchiMed and Tethys Investment Provepharm
Arteric Health care digital marketing Mountaingate Capital Relevate Health Group
Asparia Health tech Apollo Global Management Intrado Corp
Atlantic Physical Therapy Physical therapy Audax Group Phoenix Rehabilitation and Health Services
Behavior Pioneers Behavioral health Havencrest Capital Management Apara Autism Center
Behavior Therapy Solutions of Minnesota Behavioral health Frazier Healthcare Partners Caravel Autism Health
Benvenue Medical Medical devices and supplies Cherokee Advisors, Kohlberg & Company and Ellis Capital Spinal Elements
Bio-Concept Laboratories Medical devices and supplies Aurora Capital Group and The Cambria Group Pace Analytical Services
Bioclinica Health tech Nordic Capital, Novo Holdings, Ares Capital and Astorg eResearch Technolog
Biological Laboratory Clinical laboratory Pasaca Capital Innova Medical Group
BreatheAmerica Allergy and athsma treatment Harvey & Company and Source Capital Aspire Allergy & Sinus
Catalyst Behavior Solution Behavioral health Pharos Capital Group The Family Treatment Network
Centennial Hospice Hospice Dorilton Capital Traditions Home Health Care
Centurion Service Group Medical devices and supplies Prettybrook Partners and TowerBrook Capital Partners TRIMEDX
Choices of Louisiana Behavioral health BPEA Private Equity and Webster Equity Partners BayMark Health Services
Clear View Behavioral Health Behavioral health FFL Partners Summit Behavioral Healthcare
Deerwalk Health tech GTCR Cedar Gate Technologies
Desert Perinatal Associates Obstetrics Sverica Capital Management Women’s Health USA
Eye Center Of Texas Eye care Shore Capital Partners EyeSouth Partners
Harbor Light Hospice Hospice Dorilton Capital Traditions Home Health Care
Healthx Health tech Thoma Bravo Zipari
HMC HealthWork Health management services Periscope Equity Integrated Behavioral Health
Innovative Medical Systems Medical devices and supplies Ares Private Equity Group Convergint Technologies
Intelicare Health Services Home health Revelstoke Capital Partners The Care Team
Kerafast Bioresearch materials Thompson Street Capital Partners LifeSpan BioSciences
Lakeway Home Health Home health 3 Rivers Capital Amazing Care
Mednax (radiology spinoff) Radiology Starr Investment Holdings Radiology Partners
Midwest Dental Dental services Gryphon Investors, PineBridge Investments Smile Brands
Müvr Medical devices and supplies TPG Exactech
Nielsen Dermatology Dermatology Harvest Partners Advanced Dermatology & Cosmetic Surgery
NovelCath Medical devices and supplies 3i Group Cirtec Medical
Orizon360 Health tech BPEA Private Equity, DWS Group and Revelstoke Capital Partners DataLink Software
Patient Power Online cancer patient social network Topspin Partners and Praesidian Capital Remedy Health Media
Rehabcare Group (Kindred Healthcare subsidiary) Contract rehabilitation services Flexpoint Ford Select Rehabilitation
Seasons Hospice & Palliative Car Hospice Advent International AccentCare
TractManager Health tech SkyKnight Capital, Clearlake Capital Group and New Mountain Capital Symplr
Trifecta Clinical Health tech Annox Capital, Novo Holdings, Leonard Green & Partners, Arsenal Capital Partners and MSD Private Capital WIRB-Copernicus Group
University Ophthalmology Eye care MoonSail Capital, Plenary Partners and Muzinich & Co Arbor Centers For Eyecare
Updox Health tech Sixth Street Partners and Silver Lake Management EverCommerce
ViaMed Holdings Medical devices and supplies Vance Street Capital, PA Capital, Lexington Partners Motion Dynamics
VirTrial Health tech Genstar Capital Signant Health

PE Buyouts/Investments

CompanyTypePE Firm
Beacon Behavioral Hospita Behavioral health Latticework Capital Management
Cytel Health tech Nordic Capital and Astorg
Digisonics Health tech HG Capital (UK) and Ardan Equity Partners
Market Access Transformation Health tech Silversmith Capital Partners
Nutrisystem Weight management Kainos Capital and MSD Private Capital
Physical Rehabilitation Network Physical therapy Gryphon Investors
Pinnacle GI Partners Digestive health HIG
Refresh Mental Health Behavioral health Kelso Private Equity
Solmetex Medical devices and supplies Avista Capital Partners
Specialty Networks Consulting Health care consulting Linden Capital Partners
The Benecon Group Health insurance management TA Associates
UroGPO Group Purchasing Organization (GPO) for urologists Nautic Partners, Linden Capital Partners
US Med-Equip Medical devices and supplies Freeman Spogli & Co.
Wedgewood Pharmacy Pharmaceuticals Partners Group

[i]https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/h-i-g-growth-partners-invests-in-pinnacle-gi-partners-61562359

[ii]https://pestakeholder.org/report/hig-capitals-and-wellpaths-correctional-healthcare-investment-risks/

[iii]https://www.prnewswire.com/news-releases/gryphons-smile-brands-completes-acquisition-of-midwest-dental-301183441.html

[iv]https://www.wsj.com/articles/gryphon-investors-acquires-smile-brands-from-welsh-carson-1471553274

[v]https://www.prnewswire.com/news-releases/gryphons-smile-brands-completes-acquisition-of-midwest-dental-301183441.html

[vi]https://webcache.googleusercontent.com/search?q=cache:8V8048zBDeYJ:https://www.mergermarket.com/info/smile-brands-auction-struggles-sources-say+&cd=4&hl=en&ct=clnk&gl=us

[vii] Pitchbook, accessed December 2020.

[viii] According to Becker’s Dental and DSO Review, the top ten DSOs are Heartland Dental (KKR), Aspen Dental (Ares Management, Leonard Green & Partners), Pacific Dental Services, Smile Brands (Gryphon Investors), American Dental Partners (JLL Partners), Great Expressions Dental Centers (Roark Capital, Ares Capital), Dental Care Alliance (Harvest Partners, Crescent Capital), Affordable Dentures & Implants (Berkshire Partners, Partners Group), Western Dental (New Mountain Capital), InterDent (H.I.G.). Ownership data sourced from Pitchbook, accessed December 2020.

[ix]https://www.prnewswire.com/news-releases/riverside-partners-completes-merger-of-allied-dental-with-pg-dental-301182507.html

[x]https://www.nevadabusiness.com/2020/12/absolute-dental-group-closes-acquisition-of-aces-dental/

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