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Private Equity Health Care Acquisitions – December 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 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 December 2022. We will continue to track acquisitions on a monthly basis.

See November 2022 acquisitions here.

December was a relatively quiet month for private equity in healthcare. Using PitchBook, we tracked only 52 private equity buyouts, add-on acquisitions, and growth/equity investments in the healthcare space across a wide range of subsectors. For comparison, the monthly deal average from June to November was 72.5 deals, with a median of 70.5 (Source: PitchBook).

Private equity closes out the year in healthcare with a focus on medtech

Investments in medtech (e.g. medical supplies, devices, equipment, manufacturing, and related outsourcing solutions) dominated the list of PE deals in December: we counted 2 buyouts, 7 add-on acquisitions, and 2 growth investments involving 22 different investors—approximately 20% of the deals tracked this month. Six of these deals involved manufacturing companies, such as ones that produce durable medical equipment (e.g. wheelchairs) and medical supplies (e.g. drug tests). See the list below for the relevant medtech companies from December and their PE investors.

 

Medtech Deals – December 2022 (Source: PitchBook)

CompaniesCompany TypeSecondary TypeSpecialtyPE Firm(s)Deal TypeAdd-on Platform (if applicable)
Fusion BiotecMedtechdesign and engineeringmedical devicesAccelmed, Lauxera Capital Partners, Summit Partners, VeranexAdd-onVeranex
GHC ImagingMedtechmedical equipmentradiologyCane Investment PartnersAdd-onAll-Stat Portable
Jacinto Medical CorporationMedtechmedical equipmentradiology; fluoroscopyChicago Pacific Founders, CRG, Leavitt Equity Partners, Synergistic Capital PartnersAdd-onMyCare Medical Group
JacoMedtechmedical equipment manufactuing Audax Group, Blackstone Secured Lending Fund BDC (NYS: BXSL), Linden Capital PartnersAdd-onGCX Mounting Solutions
Orbit MedicalMedtechmedical equipment manufactuingdurable medical equipmentHarbert Credit Solutions, Northcreek Mezzanine, Orix Private Equity Solutions, Seven Hills CapitalAdd-onReliable Medical Supply
RAM ScientificMedtechmedical supply manufacturing Incline Equity PartnersAdd-onASP Global
SaorsaMedtechmedical devices Apposite CapitalAdd-onEmblation
AVS BioMedtechvaccine manufacturing Arlington Capital PartnersBuyout/LBO 
Premier BiotechMedtechmedical supply manufacturingdrug screeningAlign Capital PartnersBuyout/LBO 
Apex BiologixMedtechmedical equipment manufactuing Three Bridges Private CapitalPE Growth/Expansion 
World Micro ComponentsMedtechelectronic parts distributor Main Street Capital BDC (NYS: MAIN)PE Growth/Expansion 

 

In an October 2022 article, Capstone Partners explains that “private equity firms remain bullish” in the medical device outsourcing sector, partly due to an aging population and increased burden of chronic disease that drives demand for medical devices.[1] Capstone Partners points out in a separate June 2022 report that an additional factor that has attracted private equity to the medtech sector is the increase in issues beginning in 2020 that “have exposed weakness in supply chains, creating significant demand for outsourced players with multiple manufacturing operations and a lack of reliance on one supplier or geography.”.[2]

 

December sees two PE investments in the medical marijuana space

While private equity activity in the cannabis space has been largely overshadowed by venture capital,[3] December saw two notable private equity investments in cannabis-related companies.

Tilia Holdings and Warburg Pincus sponsored Certified Laboratory’s add-on acquisition of Kaycha Labs, a hemp and CBD laboratory testing business.[4] As more states enact regulations around recreational and medical marijuana via the legalization process, testing and laboratory services, like Kaycha Labs, may be an attractive investment choice for private equity. Ancillary businesses not directly involved in the cultivation, distribution, or retail of marijuana have historically offered investment opportunities within the cannabis industry less exposed to the risks associated with a substance that is still considered illicit at the federal level. These risks led to a “cash-starved” and depreciated cannabis market, according to Middle Market Growth in 2020.[5] However, with legalization in 33 states for medical use, a growing number of states permitting recreational use, and perhaps even federal legalization on the way, it is likely that more private equity companies will invest more in the sector and move from ancillary businesses to more direct investments in cannabis—the plant touching side, in industry-speak.[6]

The other big medical marijuana PE deal in December was RIV Capital’s finalized acquisition of Etain Health, a New York-based cannabis cultivation, manufacturer, and retail company, announced on December 15.[7]This $247 million deal, first announced in March 2022, will facilitate RIV’s access to New York’s cannabis market, which Reuters says “is poised to surpass California as the largest legal weed market.”[8] Reuters reported in March 2022 that a $150 million investment RIV received from Scott’s Miracle-Gro would be used to help finance a portion of the deal.[9]

 

While the overall number of traditional private equity deals in the medical marijuana space has remained relatively stable in the past 4 years, the number of venture capital investments has decreased by 63% over the same period.[10] Meanwhile, the median private equity deal value for medical marijuana related companies has increased from $20 million in 2019 to $247 million in 2022, according to PitchBook.[11] Capstone Partners is forecasting a surge in M&A activity in the cannabis sector, more broadly, over the next few years as the industry matures and legalization of recreational and medicinal marijuana use expands.[12]

 

December Buyouts (8 in total)

CompanyCompany TypeSecondary TypeSpecialtyPE Firm(s)
ABA ConnectDisability servicesapplied behavioral analysisautismMBF Healthcare Partners
Fortified Health SecurityHealth IT cybersecurityHealth Velocity Capital, Nordic Consulting Group,* Silversmith Capital Partners
ADVIHealthcare administrationconsulting Sheridan Capital Partners
Universal Marine Medical Supply InternationalHealthcare servicesmarine (cruise and commerical) healthcare Z Capital Group
AVS BioMedtechvaccine manufacturing Arlington Capital Partners
Premier BiotechMedtechmedical supply manufacturingdrug screeningAlign Capital Partners
Etain HealthWellnessmedical marijuana producer and suppliercannabisRIV Capital (CNQ: RIV)
VOS (Clinics/Outpatient Services)Wellnessmobile applicationmindfulnessSoulmates Ventures

*Nordic Consulting group is a company owned by Accrete Health Partners.[13]

 

December Add-On Acquisitions (34 in total)

CompanyCompany TypeSecondary TypeSpecialtyPE Firm(s)Add-on Platform
MBA Wellness CenterBehavioral healthSubstance abuse treatmentopioid addictionGolub Capital BDC (NAS: GBDC), Linden Capital PartnersPinnacle Treatment Centers
Nashville RecoveryBehavioral healthSubstance abuse treatmentopioid addictionBPEA Private Equity, Webster Equity PartnersBayMark Health Services
Brightech InternationalContract research organizationHealth ITclinical trial supportArlington Capital Partners, Everest Clinical ResearchEverest Clinical Research
Meridian Clinical ResearchContract research organization clinical trialsGHO CapitalVelocity Clinical Research
Suncoast Research GroupContract research organization clinical trialsBarton Technology Ventures, New MainStream CapitalFlourish Research
ComplionHealth ITDocument managementclinical trial complianceLLR PartnersRealTime Software Solutions
SwellboxHealth ITMedical records Cigna Ventures, Flex Capital, Johnson & Johnson Innovation – JJDC, Mubadala Investment Company, Sixth Street Partners, The Goldman Sachs Group (NYS: GS), Transformation CapitalDatavant
Advanced Claims Review SpecialistsHealthcare administrationMedical finance services MBF Healthcare PartnersCarisk Partners
JP RMPHealthcare administrationMedical finance servicesPractice managementNexPhase CapitalMeduit
Springboard HealthcareHealthcare administrationConsulting Cornell Capital, Trilantic North AmericaIngenovis Health
Versalus HealthHealthcare administrationRevenue cycle management Cannae Holdings (NYS: CNNE), Sanaka Group, The Carlyle Group (NAS: CG), TripleTreeCorroHealth
1st Care Home Health ServicesHome healthcare elderly/disability supportRevelstoke Capital PartnersThe Care Team
Care Perfections Health ServicesHome healthcare elderly/disability supportSearchlight Capital PartnersCare Advantage
Lighthouse HealthcareHome healthcare elderly supportSearchlight Capital PartnersCare Advantage
Kaycha Labs (Hemp and CBD Laboratory Testing Business)Laboratory services cannabisTilia Holdings, Warburg PincusCertified Laboratories
Fusion BiotecMedtechDesign and engineeringmedical devicesAccelmed, Lauxera Capital Partners, Summit Partners, Veranex(Thomas Daulton)Veranex
GHC ImagingMedtechMedical equipmentradiologyCane Investment PartnersAll-Stat Portable
Jacinto Medical CorporationMedtechMedical equipmentradiology; fluoroscopyChicago Pacific Founders, CRG, Leavitt Equity Partners, Synergistic Capital PartnersMyCare Medical Group
JacoMedtechMedical equipment manufactuing Audax Group, Blackstone Secured Lending Fund BDC (NYS: BXSL), Linden Capital PartnersGCX Mounting Solutions
Orbit MedicalMedtechMedical equipment manufactuingdurable medical equipmentHarbert Credit Solutions, Northcreek Mezzanine, Orix Private Equity Solutions, Seven Hills CapitalReliable Medical Supply
RAM ScientificMedtechMedical supply manufacturing Incline Equity PartnersASP Global
SaorsaMedtechMedical devices Apposite CapitalEmblation
AlphaGroup Medical CommunicationsMedical communications  Maranon Capital, The Riverside CompanyRed Nucleus Solutions
Luke & AssociatesMedical staffing military healthcareM33 GrowthDependable Health Services
Reproductive Endocrinology Associates of CharlotteOutpatient care fertility treatmentNordic CapitalCARE Fertility Group
Chesen Laser Eye CenterOutpatient careEye CareopthalmologyGryphon InvestorsVision Innovation Partners
CNY Diagnostic Imaging AssociatesOutpatient care medical imagingSunny River ManagementRezolut Medical Imaging
Dental Associates of North AlabamaOutpatient careDental CaregeneralSilver Oak Services PartnersSmile Partners USA
Las Vegas Smile CenterOutpatient careDental Caregeneral & cosmeticNew Mountain CapitalWestern Dental & Orthodontics
Ophthalmic PhysiciansOutpatient careEye CareopthalmologyRidgemont Equity Partners, Yukon PartnersSunvera Group
Premier Orthopaedic and Sports Medicine Associates of Southern New JerseyOutpatient care orthopedicsStone Point CapitalAmerican Orthopedic Partners
Sahara Dental (Las Vegas)Outpatient care general & cosmeticNew Mountain CapitalWestern Dental & Orthodontics
The Orthodontic GroupOutpatient care orthodontistryLeon Capital Group, TSG ConsumerSpecialty Dental Brands
DailyEndorphinWellnessWeb-based wellness platform Archetype GrowthWellable

 

December PE Growth/Expansion Investments (10 in total)

CompanyCompany TypeSecondary TypeSpecialtyPE Firm(s)
LokavantHealth IT clinical trials supportEdison Partners(Gregg Michaelson), Roivant Sciences (NAS: ROIV)(Alex Gasner)
Apex BiologixMedtechmedical equipment manufacturing Three Bridges Private Capital
World Micro ComponentsMedtechelectronic parts distributor Main Street Capital BDC (NYS: MAIN)
ClearHealth StrategiesHealthcare administrationmedical finance services Pleasant Bay Capital Partners
PMBHealthcare Real Estate  Cypress Ascendant
Medical Specialists of the Palm BeachesOutpatient care  Ascend Partners
Aerami TherapeuticsPharmaceuticals Development Undisclosed
Pharmaceutics InternationalPharmaceuticals Research Undisclosed
Twin OrbitPharmaceuticals Research Tidewater Capital Services
MedicoRx SpecialtyPharmacySpecialty pharmacyhome infusionsHildred Capital Partners

 

 


[1] Capstone Partners. “Medical Device Outsourcing M&A Market Remains Healthy Despite Economic Headwinds,” October 13, 2022. https://www.capstonepartners.com/insights/article-medical-device-outsourcing-ma-market-remains-healthy-despite-economic-headwinds/.

[2] Pg. 8; Capstone Partners. “M&A Market Remains Robust As Private Equity Builds and Enhances Sector Portfolios: Medical Device Outsourcing Sector Update,” June 2022. https://www.capstonepartners.com/wp-content/uploads/2022/06/Capstone-Partners-Medical-Device-Outsourcing-MA-Coverage-Report-June-2022.pdf.

[3] This assertion is based on data gleaned from an advanced search in PitchBook that quantified venture capital vs. private equity deals in the cannabis space over the last four years.

[4] Certified Group. “Certified Group Announces Investment in Kaycha Labs Knoxville, TN Hemp and CBD Testing Laboratory,” December 19, 2022. https://www.prnewswire.com/news-releases/certified-group-announces-investment-in-kaycha-labs-knoxville-tn-hemp-and-cbd-testing-laboratory-301705302.html.

[5] Mulligan, Kathryn. “Pot Stirs up Private Equity Interest.” Middle Market Growth (blog), April 20, 2020. https://middlemarketgrowth.org/the-round-pot-stirs-up-private-equity-interest/.

[6] Mulligan, Kathryn. “Pot Stirs up Private Equity Interest.” Middle Market Growth (blog), April 20, 2020. https://middlemarketgrowth.org/the-round-pot-stirs-up-private-equity-interest/.

[7] RIV Capital Inc. “RIV Capital Completes Final Closing of Previously Announced Etain Transaction,” December 15, 2022. https://www.prnewswire.com/news-releases/riv-capital-completes-final-closing-of-previously-announced-etain-transaction-301704695.html; Krishna, Rithika. “RIV Capital to Buy Etain Health as It Bets on New York Becoming Pot Hub | Reuters,” March 30, 2022. https://www.reuters.com/legal/transactional/riv-capital-buy-etain-health-it-bets-new-york-becoming-pot-hub-2022-03-30/.

[8] Krishna, Rithika. “RIV Capital to Buy Etain Health as It Bets on New York Becoming Pot Hub | Reuters,” March 30, 2022. https://www.reuters.com/legal/transactional/riv-capital-buy-etain-health-it-bets-new-york-becoming-pot-hub-2022-03-30/.

[9] Krishna, Rithika. “RIV Capital to Buy Etain Health as It Bets on New York Becoming Pot Hub | Reuters,” March 30, 2022. https://www.reuters.com/legal/transactional/riv-capital-buy-etain-health-it-bets-new-york-becoming-pot-hub-2022-03-30/.

[10] Based on data gleaned from an advanced search in PitchBook that quantified venture capital vs. private equity deals over the last four years.

[11] Note that PitchBook has incomplete data on deal values for private companies, so these numbers may vary.

[12] Capstone Partners. “Nascent State Markets Drive Growth for Traditional and Ancillary Businesses: Cannabis Sector Update,” August 2022. https://www.capstonepartners.com/wp-content/uploads/2022/08/Capstone-Partners-Cannabis-MA-Coverage-Report_August-2022.pdf.

[13] “Accrete Health Partners Acquires Nordic Consulting Partners,” June 1, 2022. https://www.nordicglobal.com/about/news/accrete-health-partners-acquires-nordic-consulting-partners.

 

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