Private Equity Health Care Acquisitions – January 2025

In light of continued 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 during January 2025. We will continue to track acquisitions on a monthly basis.

See December 2024 acquisitions here.

In January 2025, we tracked 7 buyouts, 49 add-on acquisitions, and 19 growth/expansion investments.

Debt funded growth for Help at Home continues

In January, Chicago-based home care and disability services company Help at Home made three additions in the northeast U.S., acquiring Penn Highlands Personal Care Services (PHPCS) and Affordable Home Care in Pennsylvania, and Total Care Home Health in Delaware.[1]

Help at Home’s president previously told Home Health Care News about the company’s emphasis on growth: “Growth continues to be really strong in what we do, both organic growth and M&A activity.”[2] In September 2024, Help at Home made three add-on acquisitions in the state of Georgia, approximately one year after the company shuttered operations in the neighboring state of Alabama due to purported cost concerns.[3]

In September 2024, Moody’s noted that “Help at Home’s high financial leverage and propensity for acquisitions and shareholder distributions leave it exposed to governance risks.”[4]

The same month that Help at Home made three acquisitions in Georgia, and a year after it shuttered operations in Alabama, the company paid its private equity owners a $262.6 million debt-funded dividend.[5]

The company’s owners – which include Centerbridge Partners, Vistria Group, and Wellspring Capital Partners – added $1.5 billion in debt to Help at Home’s balance sheet, to be used to repay the company’s existing debt, to fund the $262.6 million dividend payment to its owners, and to cover related fees and expenses.[6]

In a 2023 blog post discussing the Alabama departure, PESP noted that Centerbridge and Vistria partially funded the acquisition of Help at Home by placing $745 million in debt onto the company’s balance sheet, and the company later took on more debt to fund its acquisition-based growth.[7]

As of September 2024, S&P Global gave moderately negative consideration to the company’s governance – and commented on private equity ownership in general – stating that Help at Home’s high debt levels reflect “corporate decision-making that prioritizes the interests of controlling owners, in line with our view of most rated entities owned by private-equity sponsors.”[8]

BrightSpring spins off behavioral health services to new private equity owners

In January, BrightSpring Health Services divested its behavioral health business, ResCare Community Living, to private equity-owned provider Sevita for $835 million. ResCare offers applied behavioral analysis (ABA), mental health services, community living, and a behavioral health pharmacy.[9]

BrightSpring was acquired by private equity firm KKR in a $1.32 billion deal in 2019, with Walgreens Boots Alliance acquiring a minority stake.[10] KKR and Walgreens remained majority owners following BrightSpring’s initial public offering in January 2024,[11] and in September 2024, KKR acquired Walgreens’ ownership stake.[12]

Sevita is owned by private equity firms Centerbridge Partners, Vistria Group, and Madison Dearborn.[13] Private equity firms Madison Dearborn, Vestar Capital, and Windrose Health Investors owned the company from 2001 until the company went public 2014 with Vestar retaining a majority stake. The company was taken private again by Centerbridge and Vistria in 2019.[14]

The company has received attention for providing inadequate care with sometimes fatal outcomes. According to an investigation by the U.S. Senate Committee on Finance, from 2005 until 2014 at least 86 children died while in the custody of Sevita (formerly known as the Mentor Network[15]).[16]

More recently, Sevita’s private equity owners have extracted hundreds of millions from the company. In the two years until February 2021, Centerbridge and Vistria extracted nearly half a billion dollars in debt-funded dividends from Sevita.[17] As mentioned in an earlier section of this blog, these firms also have a history of extracting dividends from home care and disability services provider, Help at Home.

Brightspring’s ResCare segment is likely an attractive target for Sevita because many of the patients ResCare serves, especially dual-eligible individuals with complex care needs, are among the highest healthcare spenders.

New Mountain’s revenue cycle management deals

In January, private equity firm New Mountain Capital continued to build out its revenue cycle management (RCM) holdings with the acquisition of artificial intelligence payments platform Machify, which New Mountain will merge with three health tech companies it acquired last fall.[18] New Mountain also made a growth investment in Access Healthcare, a revenue cycle management group that processes more than $120 billion in claims each year.[19]

Revenue cycle management, according to private equity-owned accounting and consulting firm Baker Tilly, “involves the control of payments as they flow through the healthcare ecosystem, amongst patients, providers, facilities and suppliers. Activities falling under the RCM umbrella include billing, collections, coding, data analytics and compliance.”[20]

New Mountain has been actively pursuing revenue cycle management acquisitions. In early 2024, it made a $5.8 billion buyout offer to revenue cycle management technology company R1 RCM.[21]  New Mountain was outbid in August, when private equity firms TowerBrook Capital Partners and Clayton, Dubilier & Rice announced that they would acquire R1 RCM in a deal valuing the company at $8.9 billion.[22]

Leading healthcare industry publication Becker’s Hospital Review has prepared a helpful list that illustrates RCM’s scope – “354+ healthcare revenue cycle management companies to know” – which was updated in October 2024 to include 397 companies.[23]

PESP identified 113 private equity-owned companies providing healthcare RCM services, or 28.5% of companies included on the Becker’s list. For a list of the private equity-owned RCM companies, see this PESP document. For descriptions, refer to the complete Becker’s list of 354+ companies.[24]

For a list including other private equity-owned revenue cycle management companies, see the appendix in our recent report: Private Equity’s Revenue Cycle: Creating and Collecting U.S. Medical Debt.

Resources

[1] PR Newswire. “Help at Home Announces Multiple Northeast Home Care Acquisitions,” January 8, 2025. https://www.prnewswire.com/news-releases/help-at-home-announces-multiple-northeast-home-care-acquisitions-302344550.html.

[2] Joyce Famakinwa. “Help at Home Plans To Double Down On Home Care, Expand Service Area In Near-Term Future.” Home Health Care News, September 3, 2024. https://homehealthcarenews.com/2024/09/help-at-home-plans-to-double-down-on-home-care-expand-service-area-in-near-term-future/.

[3] Private Equity Stakeholder Project PESP. “Private Equity Health Care Acquisitions – September 2024,” October 30, 2024. https://pestakeholder.org/news/private-equity-health-care-acquisitions-september-2024/.

[4] Moody’s Investors Service. “Moody’s Ratings Affirms HAH Group Holding’s B2 CFR, Assigns B2 Ratings to Proposed Senior Secured Debts; Outlook Stable,” September 10, 2024. https://www.moodys.com/research/Moodys-Ratings-affirms-HAH-Group-Holdings-B2-CFR-assigns-B2-Rating-Action–PR_492715.

[5] Michael Fenne. “Debt-Funded Dividend Paid to Help at Home Owners One Year after State Closure.” Private Equity Stakeholder Project PESP, September 24, 2024. https://pestakeholder.org/news/debt-funded-dividend-paid-to-help-at-home-owners-one-year-after-state-closure/.

[6] Moody’s Investors Service. “Moody’s Ratings Affirms HAH Group Holding’s B2 CFR, Assigns B2 Ratings to Proposed Senior Secured Debts; Outlook Stable,” September 10, 2024. https://www.moodys.com/research/Moodys-Ratings-affirms-HAH-Group-Holdings-B2-CFR-assigns-B2-Rating-Action–PR_492715.

[7] Michael Fenne. “PE-Owned Home Health Company Terminates Operations in Alabama.” Private Equity Stakeholder Project PESP, September 21, 2023. https://pestakeholder.org/news/pe-owned-home-health-company-terminates-operations-in-alabama/.

[8] S&P Global Ratings. “HAH Group Holding Co. LLC ‘B-’ Rating Affirmed On Refinancing And Sponsor Dividend; Outlook Stable; New Debt Rated,” September 10, 2024. https://disclosure.spglobal.com/ratings/en/regulatory/article/-/view/type/HTML/id/3247866.

[9] Morgan Gonzales. “BrightSpring Sells IDD Business to Sevita for $835M.” Behavioral Health Business, January 21, 2025. https://bhbusiness.com/2025/01/21/brightspring-sells-idd-business-to-sevita-for-835m/.

[10] Reuters. “KKR-Backed BrightSpring Valued at $2.5 Billion on Lukewarm Debut (Jan 26),” January 31, 2024. https://www.reuters.com/markets/deals/kkr-backed-brightspring-valued-205-billion-lukewarm-debut-2024-01-26/.

[11] BrightSpring Health Services. “BrightSpring Celebrates First Day of Trading on Nasdaq,” January 26, 2024. https://ir.brightspringhealth.com/news-releases/news-release-details/brightspring-celebrates-first-day-trading-nasdaq/.

[12] Andrew Donlan. “Investment Firm KKR Strikes Massive Deal To Acquire Shares Of BrightSpring From Walgreens.” Home Health Care News, September 16, 2024. https://homehealthcarenews.com/2024/09/investment-firm-kkr-strikes-massive-deal-to-acquire-shares-of-brightspring-from-walgreens/.

[13] Chris Larson. “Madison Dearborn to Buy 25% of Sevita at Roughly $3B Valuation.” Behavioral Health Business, January 20, 2022. https://bhbusiness.com/2022/01/20/madison-dearborn-to-buy-25-of-sevita-at-roughly-3b-valuation/. See also Moody’s Investors Service. “Moody’s Ratings Affirms National MENTOR’s B3 CFR; Stable Outlook | Rating Action,” January 24, 2025. https://www.moodys.com/research/Moodys-Ratings-affirms-National-MENTORs-B3-CFR-stable-outlook-Rating-Action–PR_501596; The Vistria Group. “Portfolio.” Accessed February 13, 2025. https://vistria.com/portfolio/.

[14] Eileen O’Grady. “The Kids Are Not Alright: How Private Equity Profits Off of Behavioral Health Services for Vulnerable and At-Risk Youth,” p.10. Private Equity Stakeholder Project PESP, February 2022. https://pestakeholder.org/wp-content/uploads/2022/02/PESP_Youth_BH_Report_2022.pdf.

[15] Sevita. “The MENTOR Network Is Becoming Sevita,” September 23, 2021. https://sevitahealth.com/news-article/the-mentor-network-is-becoming-sevita/.

[16] Aaron Roston and Jeremy Singer-Vine, “Senate Finds 86 Children Died In Care Of Giant For-Profit Foster Care Firm, Citing BuzzFeed News,” Buzzfeed News, October 18, 2017. https://www.buzzfeednews.com/article/aramroston/senate-finds-86-children-died-in-care-of-giant-for-profit

[17] Moody’s Investors Service. “Moody’s Downgrades National MENTOR Holdings, Inc.’s First Lien Credit Facilities to B2 from B1; B2 CFR Affirmed; Outlook Is Stable | Rating Action,” January 27, 2020. https://www.moodys.com/research/Moodys-downgrades-National-MENTOR-Holdings-Incs-first-lien-credit-facilities-Rating-Action–PR_417670; Moody’s Investors Service. “Moody’s Affirms National Mentor’s B2 CFR; Outlook to Negative | Rating Action,” February 9, 2021. https://www.moodys.com/research/Moodys-affirms-National-Mentors-B2-CFR-outlook-to-negative-Rating-Action–PR_439884.

[18] Heather Landi. “New Mountain Capital to Buy Machinify, Forming $5B Business.” Fierce Healthcare, January 10, 2025. https://www.fiercehealthcare.com/health-tech/new-mountain-capital-acquire-ai-company-machinify-form-5b-medical-payments-powerhouse. Prasanna Ganesan. “New Mountain Capital to Acquire Machinify and Combine with Leading Healthcare Intelligence and Payment Platform.” Machinify, January 10, 2025. https://www.machinify.com/resources/new-mountain-capital-to-acquire-machinify-and-combine-with-leading-healthcare-intelligence-and-payment-platform.

[19] Dave Muoio. “New Mountain Capital Invests in RCM Company Access Healthcare.” Fierce Healthcare, January 14, 2025. https://www.fiercehealthcare.com/finance/report-new-mountain-capital-close-acquiring-rcm-group-accessf-healthcare. Access Healthcare. “Access Healthcare Announces Growth Investment from New Mountain Capital,” January 14, 2025. https://www.accesshealthcare.com/news/access-healthcare-announces-growth-investment-from-new-mountain-capital.

[20] Baker Tilly. “Healthcare M&A Update: Q2 2019,” September 11, 2019. https://www.bakertilly.com/insights/healthcare-ma-update-q2-2019. Stephen Foley, Antoine Gara, and Arash Massoudi. “Private Equity Buys Majority Stake in US Accounting Firm Baker Tilly.” Financial Times, February 5, 2024. https://www.ft.com/content/ca7d9384-7255-4b43-a84e-01a8b48b232d.

[21] Dave Muoio. “R1 RCM Receives $5.8B Buyout Offer from New Mountain Capital.” Fierce Healthcare, February 26, 2024. https://www.fiercehealthcare.com/health-tech/revenue-cycle-management-company-r1-rcm-receives-58b-buyout-offer-shareholder-new.

[22] Andrew Cass. “R1 RCM Going Private in $8.9B Deal.” Becker’s Hospital CFO Report, August 1, 2024. https://www.beckershospitalreview.com/finance/r1-rcm-going-private-in-8-9b-deal.html.

[23] Anna Falvey. “354+ Healthcare Revenue Cycle Management Companies to Know | 2024,” September 23, 2024. https://www.beckershospitalreview.com/lists/354-revenue-cycle-management-companies-to-know-2024.html.

[24] Anna Falvey. “354+ Healthcare Revenue Cycle Management Companies to Know | 2024,” September 23, 2024. https://www.beckershospitalreview.com/lists/354-revenue-cycle-management-companies-to-know-2024.html.