Private Equity Health Care Acquisitions – June 2024

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 or announced during June 2024. We will continue to track acquisitions on a monthly basis.

See May 2024 acquisitions here.

In June 2024, we tracked 12 buyouts, 34 add-on acquisitions, and 27 growth/expansion investments.

Revenue cycle management

Several June acquisitions were of companies specializing in revenue cycle management. RCM includes identifying, managing, and collecting medical claims and patient payments.[1]

Three companies were acquired in June by Provana,[2] a revenue cycle management company that has been owned by private equity firm Long Ridge Equity Partners since 2020.[3] In a press release announcing the acquisitions, Provana included two other acquisitions from previous months—for a total of five recent roll-ups. The acquired companies include Account Matters, CIS, To the Point Billing Solutions, ACI Therapy Billing, and Central Iowa Medical Billing.[4]

Additionally, private equity firm Vista Equity Partners acquired revenue cycle management company Model N in a public-to-private transaction valuing the company at approximately $1.25 billion. Model N provides revenue management services for pharmaceutical, medical technology, and other technology-based companies.[5]

Broader trends in healthcare consolidation have accelerated private equity’s interest in revenue cycle management. As medical (MSOs) and dental service organizations (DSOs) – often owned by private equity firms – consolidate individual healthcare practices into large platform companies, increased focus is placed on accounts receivable and revenue management, adding to demand for RCM services.[6]

The revenue cycle management industry has achieved significant scale. The RCM services market was estimated at $96.8 billion globally in 2022, according to one recent report, which expects the market to reach $238.4 billion by 2030.[7] North America makes up more than half of the RCM market, with the U.S. accounting for the region’s largest revenue share.[8] As a subsegment, the U.S. medical billing outsourcing market was estimated to be approximately $5.7 billion in 2023.[9]

Outsourced revenue cycle management services are expected to become increasingly common. One headline from March 2024 assigned its readers to a sizeable task: “274+ healthcare revenue cycle management companies to know.”[10] A study conducted in late 2022 found 61% of healthcare providers expected to increase their outsourcing of RCM processes in the coming years.[11]

Clinical research

Pinnacle Clinical Research was notably active acquiring clinical research companies. Pinnacle had just three sites when it was acquired by private equity firm LongueVue Capital in 2022.[12] In 2023, the company merged with South Texas Research Institute, a clinical trial site operator.[13] And in June 2024, Pinnacle Clinical Research acquired five more sites, broadening its scope to 12 locations.[14]

The acquisitions will expand the types of clinical trials Pinnacle will perform. The company has historically focused on treatment and detection of fatty liver disease, as well as other advanced-stage liver diseases.[15] Through the add-ons, Pinnacle expands its focus to research on the central nervous system and Alzheimer’s Disease.[16]

LongueVue Capital has also owned trial site operator Summit Clinical Research since late 2022, when it acquired the company in a leveraged buyout.[17] Summit Clinical Research focuses on trials involving a type of non-alcoholic fatty liver disease.[18] The company has more than 100 locations in 7 countries in areas including the U.S., Europe, South America, and the Caribbean.[19]

In a PESP analysis of 2023 deal activity, clinical research saw 38 deals, consisting of 6 buyouts, 10 growth/expansion investments, and 22 add-on acquisitions.[20] Despite a broader private equity downturn, clinical trials were one of the few sectors that managed to see strong deal flow last year, according to PitchBook. The clinical trial industry is highly fragmented, which can be attractive for private equity firms that seek to roll-up clinical trial sites and resell the bigger company for a profit.[21]

Eleven of private equity’s top 25 healthcare investors have bought stakes in clinical research companies, according to a KHN report from December 2022. The report highlighted risks from private equity’s consolidation strategy in clinical trials, including staffing issues and closures at multiple locations for one private equity-owned site operator.[22]

Table 1: Buyouts

Table 2: Add-on acquisitions

 Table 3: Growth/Expansion Investments

Resources

[1] RevCycleIntelligence. “What Is Healthcare Revenue Cycle Management?,” February 14, 2022. https://revcycleintelligence.com/features/what-is-healthcare-revenue-cycle-management.

[2] “PitchBook Profile – Provana.” Accessed July 11, 2024. https://my.pitchbook.com/profile/338591-53/company/profile#investments.

[3] Long Ridge. “Provana.” Accessed July 10, 2024. https://long-ridge.com/portfolio_companies/1074/.

[4] Business Wire. “Provana Announces Strategic Expansion of Revenue Cycle Management Solutions,” June 25, 2024. https://www.businesswire.com/news/home/20240625528491/en/Provana-Announces-Strategic-Expansion-of-Revenue-Cycle-Management-Solutions.

[5] Model N. “Vista Equity Partners Completes Acquisition of Model N,” June 27, 2024. https://www.modeln.com/company/news/press-center/vista-equity-partners-completes-acquisition-of-model-n/.

[6] Gareth Petsch and Robert Garrett. “Revenue Cycle Management: An Important Opportunity for Healthcare.” Citi Commercial Bank, July 2020. https://www.citigroup.com/rcs/citigpa/storage/public/icpublic/Healthcare-Revenue-Cycle-Management-FINAL.pdf.

[7] Research and Markets. “Global Revenue Cycle Management Market Report 2023-2030: Cutting-Edge Systems Accelerate Growth, On-Premise RCM Software Dominates.” Yahoo Finance, January 24, 2024. https://finance.yahoo.com/news/global-revenue-cycle-management-market-121500565.html.

[8] Grand View Research. “Revenue Cycle Management Market Size Report, 2030,” April 2024. https://www.grandviewresearch.com/industry-analysis/revenue-cycle-management-rcm-market.

[9] Grand View Research. “U.S. Medical Billing Outsourcing Market Size Report, 2030,” November 2023. https://www.grandviewresearch.com/industry-analysis/us-medical-billing-outsourcing-market.

[10] Anna Falvey. “274+ Healthcare Revenue Cycle Management Companies to Know | 2023.” Becker’s Hospital Review, March 20, 2024. https://www.beckershospitalreview.com/lists/274-healthcare-revenue-cycle-management-companies-to-know-2023.html.

[11] Victoria Bailey. “61% of Providers Plan to Outsource Revenue Cycle Management Tasks.” RevCycleIntelligence, April 10, 2023. https://revcycleintelligence.com/news/61-of-providers-plan-to-outsource-revenue-cycle-management-tasks.

[12] LongueVue Capital. “LongVue Capital Completes Investment in Pinnacle Clinical Research.” PR Newswire, November 16, 2022. https://www.prnewswire.com/news-releases/longuevue-capital-completes-investment-in-pinnacle-clinical-research-llc-301679640.html.

[13] Iris Dorbian. “LVC-Backed Pinnacle Clinical Research Merges with South Texas Research Institute.” PE Hub, January 12, 2023. https://www.pehub.com/lvc-backed-pinnacle-clinical-research-merges-with-south-texas-research-institute/.

[14] LongueVue Capital. “Pinnacle Clinical Research Accelerates Its Rapid Expansion with Multiple Acquisitions and Strategic Partners.” PR Newswire, June 18, 2024. https://www.prnewswire.com/news-releases/pinnacle-clinical-research-accelerates-its-rapid-expansion-with-multiple-acquisitions-and-strategic-partnerships-302175647.html.

[15] Pinnacle Clinical Research. “Fatty Liver Disease – Free Screening.” Accessed July 10, 2024. https://www.pinnacleresearch.com/.

[16] LongueVue Capital. “Pinnacle Clinical Research Accelerates Its Rapid Expansion with Multiple Acquisitions and Strategic Partners.” PR Newswire, June 18, 2024. https://www.prnewswire.com/news-releases/pinnacle-clinical-research-accelerates-its-rapid-expansion-with-multiple-acquisitions-and-strategic-partnerships-302175647.html.

[17] Abacus Finance. “Abacus Finance Provides Senior Debt Financing to Support the Leveraged Buyout of Summit Clinical Research by Longvue Capital,” November 21, 2022. https://abacusfinance.com/press-releases-1/abacus-finance-provides-senior-debt-financing-to-support-the-leveraged-buyout-of-summit-clinical-research-by-longuevue-capital.

[18] Summit Clinical Research. “About Summit.” Accessed July 11, 2024. https://summitclinicalresearch.com/about-summit/.

[19] Summit Clinical Research. “Our Sites.” Accessed July 10, 2024. https://summitclinicalresearch.com/sites/.

[20] Mary Bugbee, Eileen O’Grady, and Michael Fenne. “Private Equity in U.S. Healthcare: Trends in 2023 Deal Activity.” Private Equity Stakeholder Project, March 6, 2024. https://pestakeholder.org/private-equity-healthcare-2023-trends/

[21] Bannow, Tara. “Lasers, Cardiology, Clinical Trials: 2023’s Top Private Equity Targets.” STAT, February 9, 2024. https://www.statnews.com/2024/02/09/lasers-cardiology-clinical-trials-2023s-top-private-equity-targets/; PitchBook. “Q4 2023 Healthcare Services Report,” February 8, 2024. https://pitchbook.com/news/reports/q4-2023-healthcare-services-report.

[22] Rachana Pradhan. “The Business of Clinical Trials Is Booming. Private Equity Has Taken Notice.” Fortune, December 2, 2022. https://fortune.com/2022/12/02/clinical-trials-private-equity-headlands-research/.