Private Equity Healthcare Acquisitions – January 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 January 2023. We will continue to track acquisitions on a monthly basis.

See December 2022 acquisitions here.

January saw an uptick from the previous month for private equity in healthcare. Using PitchBook, we tracked 84 private equity acquisitions in January. This figure includes 56 add-on acquisitions, 19 growth/equity investments, and 9 buyouts in the healthcare space across a wide range of subsectors. For comparison, there were only 52 private equity acquisitions in December. (Source: PitchBook).

Private equity keeps attention on medtech

The year opened with continued attention on medtech acquisitions (i.e., medical supplies, devices, equipment, manufacturing, and related outsourcing). There were 7 add-on acquisitions of medtech companies, primarily focused on manufacturing of medical devices and supplies.

Private equity deal value in healthcare devices and supplies saw a sharp upturn during the pandemic, increasing from $11.1 billion to $43.5 billion from 2020 to 2021—despite 2021 only seeing one more deal in this area than the previous year.[1] Additionally, in the decade leading up to 2022, private equity invested over $280 billion in medical technologies.[2]

Medtech acquisitions in January included Axial Medical, which was acquired by the Carlyle Group through its portfolio company Groupe Acrotec. Carlyle acquired Acrotec in February 2021, and is using the company as a platform to expand into services into Europe, Asia, and North America. The add-on company, Axial, was founded in 2014 and operates a 40,000 sq. ft. facility near Philadelphia, where it manufactures orthopedic implants for spine, trauma, and extremity treatments.[3]

Carlyle, alongside private equity firm GTCR, acquired an additional two medtech companies through its portfolio company Resonetics. Resonetics agreed to acquire Memry Corporation and SAES Smart Materials, Inc. from a company based in Italy. The acquired companies are U.S. based, and have operations in Connecticut, New York, and California.[4]

Health IT also sees increased attention

There was also high activity in the related field of Health IT, including 9 add-on acquisitions during the month of January. Health IT includes software and technology relating to data and analytics, care management, enterprise software, and revenue cycle management.

Health IT’s growth has been facilitated by the increasing demand for telehealth services. In 2020 the federal government loosened restrictions on Medicare, allowing for expanded coverage and reimbursement for telehealth services.  In December 2022, these provisions were expanded through 2024.[5] In 2021, some analysts were referring to a “quarter-trillion dollar economic opportunity presented by telehealth.”[6]

As electronically enabled healthcare has become more common, policymakers have also sought to expand oversight. One recently proposed CMS rule would require payers to participate in electronic data exchange and automated authorization processes. The proposal would incentivize better recordkeeping, but also require providers to increase IT investment in order to make necessary improvements.[7]

One emblematic deal is Home Care Pulse, which in January acquired Activated Insights and Pinnacle Quality Insight. HCP is owned by private equity firm Cressey & Company. The acquisitions expand on Home Care Pulse’s “clinician-developed eLearning, satisfaction survey, and reputation management solutions” in the post-acute care market.[8]

Outpatient care consolidation in various specialties

January also continued PE activity in outpatient care consolidation, with 11 add-on acquisitions of outpatient care providers. The acquisitions include providers of dental care, eye care, and primary care, among other specialties. This continues trends from 2022, where outpatient care saw a higher amount of private equity deal activity compared to other healthcare areas.[9]

According to a recent survey, hospital and health executives expect large increases in outpatient volume in 2023, consistent with a shift from inpatient to outpatient care since the start of the pandemic. The analysis indicates that 95 percent of executives project higher outpatient volumes, with 40 percent anticipating increases of 10 percent or more.[10]

January Buyouts (9 total)

January Add-on Acquisitions (56 total)

January PE Growth/Expansion Investments (19 total)

[1] Caitlin Owens. “Private Equity’s Pandemic-Era Health Care Push.” Axios, March 23, 2022. https://www.axios.com/2022/03/23/pharmaceuticals-private-equity-medical-devices-drug-prices.

[2] American Investment Council. “Improving Medical Technologies: Private Equity’s Role Supporting Life Sciences,” March 22, 2022. https://www.investmentcouncil.org/improving-medical-technologies-private-equitys-role-supporting-life-sciences/.

[3] John McNulty. “Carlyle’s Acrotec Acquires Family-Owned Axial Medical.” Private Equity Professional, February 13, 2023. https://peprofessional.com/blog/2023/02/13/carlyles-acrotec-acquires-family-owned-axial-medical/.

[4] Carlyle. “Resonetics to Acquire SAES Medical Nitinol Business | Carlyle,” January 9, 2023. https://www.carlyle.com/media-room/news-release-archive/resonetics-to-acquire-saes-medical-nitinol-business.

[5] Christine Clements, Aileen Murphy, Michael Sutton, Arushi Pandya, and Kendall Kohlmeyer. “Key Healthcare Provisions of the Consolidated Appropriations Act, 2023.” Healthcare Law Blog, January 6, 2023. https://www.sheppardhealthlaw.com/2023/01/articles/federal-healthcare-legislation/key-healthcare-provisions-of-the-consolidated-appropriations-act-2023/.

[6] Oleg Bestsennyy, Greg Gilbert, Alex Harris, and Jennifer Rost. “Telehealth: A Quarter-Trillion-Dollar Post-COVID-19 Reality?” McKinsey, July 9, 2021. https://www.mckinsey.com/industries/healthcare/our-insights/telehealth-a-quarter-trillion-dollar-post-covid-19-reality.

[7] JD Supra. “Private Equity and Digital Health in 2023: Policy Updates and Trends to Watch,” February 1, 2023. https://www.jdsupra.com/legalnews/private-equity-and-digital-health-in-2893899/.

[8] Home Care Pulse. “Home Care Pulse Acquires Activated Insights and Pinnacle Quality Insight.” Cision PR Newswire, January 19, 2023. https://www.prnewswire.com/news-releases/home-care-pulse-acquires-activated-insights-and-pinnacle-quality-insight-301725299.html.

[9] Private Equity Stakeholder Project. “New Report Analyzes a Frenzy of Private Equity Activity in Healthcare Companies,” February 23, 2023. https://pestakeholder.org/news/new-report-analyzes-a-frenzy-of-private-equity-activity-in-healthcare-companies/.

[10] Guidehouse. “2023 Health System Trends,” March 2, 2023. https://guidehouse.com/insights/healthcare/2023/2023-health-system-trends-form?lang=en.