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

See July 2023 acquisitions here.

See all our 2022 acquisitions updates here.

KKR’s Acquisition of Colorado Fertility Clinics Reflects Growing PE Presence in Fertility Industry
KKR, through its platform Reproductive Medicine Associates (RMA), in August acquired fertility treatment provider Conceptions Reproductive Associates of Colorado.[1]

RMA is the US segment of IVI-RMA Global, the largest assisted reproduction group in the world with 161 clinics and labs throughout the U.S., Europe and Latin America. RMA’s US business includes 25 fertility centers in New Jersey, Pennsylvania, Florida, Texas, California and Washington.[2]

KKR’s expansion of IVI-RMA Global comes as the fertility market is growing quickly. Market research estimates the fertility clinic market was an estimated $7.9 billion in 2022 and is forecast to grow at a rate of 13.6% annually to reach $16.8 billion by the end of 2028.[3] PE firms are capitalizing on this growing and lucrative industry, which remains relatively fragmented and offers opportunities to profit through consolidation.[4]

According to a 2020 study published in JAMA Internal Medicine, the years 2010 to 2016 saw very little PE investment in women’s health and fertility clinics “followed by a rapid influx of private equity activity in both OB-GYN and fertility clinics, with more than twice as many affiliations from 2017 through 2019 as seen as the previous seven years.”[5]

In a follow up study published in October 2021, the authors studied the influence of private equity in fertility treatment using data reported by the Centers for Disease Control and Prevention (CDC) on the rate of Assisted Reproductive Technology (ART) cycles. ART includes all fertility treatments in which either eggs or embryos are handled. The authors found that private equity-owned providers made up 29.3% of the of all ART cycles performed in the US in 2018, and noted that they were not aware of any healthcare specialty with such a pronounced market share.[6]

In addition, patients at PE-owned clinics were found to be 10.6% more likely to use preimplantation genetic testing, which raises questions about whether these clinics more actively push elective and costly add-ons. PE-affiliated practices also tended to be in wealthier geographic areas, raising additional questions about PE’s role in exacerbating class discrepancies in access to fertility services.[7]

These concerns are heightened by the fact that regulation of the fertility industry is fragmented. The CDC tracks ART cycles, the FDA oversees devices and drugs used in fertility treatments, and states oversee physician medial licenses – but there is no central regulatory body with oversight over fertility centers.[8]

KKR’s Track Record Raises Red Flags
KKR’s performance in other healthcare investments raises additional red flags about its growth in the fertility sector.

KKR’s staffing firm Envision Healthcare, notorious for its use of surprise medical billing and lobbying against efforts to reign in the practice, filed for bankruptcy in May.[9] KKR-backed cancer treatment provider GenesisCare filed for bankruptcy in June.[10] At least two other KKR-owned healthcare companies face very high credit risk: Covenant Physician Partners[11] and One Call Corporation,[12] which both have a Caa1-PD Probability of Default Rating according to Moody’s.

KKR has also come under scrutiny for taking on massive debt at its company BrightSpring Health Services, which operates group homes for people with intellectual and developmental disabilities, to grow its operations despite declining conditions at its existing locations. A 2022 investigation found that “KKR focused on expanding the business even as a crisis mounted in its group home division, where conditions grew so dire that nurses and caretakers quit in droves, a state prohibited the company from accepting new residents, and some of the most vulnerable people in its care suffered and died.”[13]

August 2023 Buyouts

August 2023 Add-On Acquisitions

August 2023 Growth Investments

[1] Reproductive Medicine Associates, “Reproductive Medicine Associates (RMA) Announces the Addition of Conceptions Reproductive Associates of Colorado to Its World Leading Network of Fertility Clinics,” Cision Newswire, August 23, 2023, https://www.prnewswire.com/news-releases/reproductive-medicine-associates-rma-announces-the-addition-of-conceptions-reproductive-associates-of-colorado-to-its-world-leading-network-of-fertility-clinics-301908462.html.

[2] Reproductive Medicine Associates, “Reproductive Medicine Associates (RMA) Announces the Addition of Conceptions Reproductive Associates of Colorado to Its World Leading Network of Fertility Clinics.”

[3] “US Fertility Clinics Market Report 2023: Sector Is Expected to Reach $16.8 Billion by 2028 at a CAGR of 13.6% – ResearchAndMarkets.Com,” Business Wire, July 13, 2023, https://www.businesswire.com/news/home/20230713777238/en/US-Fertility-Clinics-Market-Report-2023-Sector-is-Expected-to-Reach-16.8-Billion-by-2028-at-a-CAGR-of-13.6—ResearchAndMarkets.com.

[4] Bella North and Hamid Yunis, “Spotlight on Private Equity in the Fertility Sector,” McDermott Will & Emery (blog), May 22, 2019, https://www.mwe.com/insights/spotlight-on-private-equity-in-the-fertility-sector/.

[5] Alexander Borsa Richardson Joseph Bruch, Sarah S., “When Private Equity Firms Invest in Women’s Health Clinics, Who Benefits?,” STAT News, September 14, 2020, https://www.statnews.com/2020/09/14/private-equity-firms-invest-womens-health-clinics-who-benefits/.

[6] Joseph Bruch and Alex Borsa, “Explainer: Our New Paper Exploring the Implications of Private Equity Acquisitions in Fertility Industry for Patients,” GenderSci Lab, October 25, 2021, https://www.genderscilab.org/blog/private-equity-acquisitions-in-fertility-industry.

[7] Alexander Borsa and Joseph Dov Bruch, “Prevalence and Performance of Private Equity-Affiliated Fertility Practices in the United States,” Fertility and Sterility 117, no. 1 (January 2022): 124–30, https://doi.org/10.1016/j.fertnstert.2021.08.035.

[8] Naomi Cahn, “When Fertility Clinics Get It Wrong,” Forbes, August 8, 2019, https://www.forbes.com/sites/naomicahn/2019/08/08/when-fertility-clinics-get-it-wrong/?sh=4cd552281f4a.

[9] Mary Bugbee, “It Should Come as No Surprise That KKR-Owned Envision Healthcare Has Finally Declared Bankruptcy,” Private Equity Stakeholder Project (blog), June 6, 2023, https://pestakeholder.org/news/it-should-come-as-no-surprise-that-kkr-owned-envision-healthcare-has-finally-declared-bankruptcy/.

[10] Becky Yerak, “KKR-Backed Cancer-Treatment Provider GenesisCare Files for Bankruptcy,” Wall Street Journal, June 1, 2023, sec. WSJ Pro, https://www.wsj.com/articles/kkr-backed-cancer-treatment-provider-genesiscare-files-for-bankruptcy-953132cf.

[11] “Moody’s Downgrades Covenant Physician Partners’ CFR to Caa1, Outlook Stable | Rating Action,” Moody’s Investor Service, October 14, 2022, https://www.moodys.com/research/Moodys-downgrades-Covenant-Physician-Partners-CFR-to-Caa1-outlook-stable-Rating-Action–PR_470351. ; see all credit ratings for Covenant Physician Partners here: https://www.moodys.com/credit-ratings/Covenant-Physician-Partners-credit-rating-825736400/reports?category=Ratings_and_Assessments_Reports_rc%7CIssuer_Reports_rc&type=Rating_Action_rc%7CAnnouncement_of_Periodic_Review_rc,Credit_Opinion_ir_rc

[12] “Moody’s Downgrades One Call’s CFR to Caa1; Outlook Stable | Rating Action,” Moody’s Investor Service, September 22, 2022, https://www.moodys.com/research/Moodys-downgrades-One-Calls-CFR-to-Caa1-outlook-stable-Rating-Action–PR_469862. ; see all credit ratings for One Call Corporation here: https://www.moodys.com/credit-ratings/One-Call-Corporation-credit-rating-823643343/reports?category=Ratings_and_Assessments_Reports_rc%7CIssuer_Reports_rc&type=Rating_Action_rc%7CAnnouncement_rc%7CAnnouncement_of_Periodic_Review_rc,Credit_Opinion_ir_rc

[13] Kendall Taggart, “Since KKR Bought BrightSpring, Some People With Disabilities Have Suffered,” Buzzfeed News, April 25, 2022, https://www.buzzfeednews.com/article/kendalltaggart/kkr-brightspring-disability-private-equity-abuse.