Private equity healthcare acquisitions – July 2023
September 8, 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 July 2023. We will continue to track acquisitions on a monthly basis.
See June 2023 acquisitions here.
See all our 2022 acquisitions updates here.
In July 2023, the healthcare sector saw private equity firms make 60 deals in total: 5 buyouts (8.3%), 45 add-on acquisitions (75.0%), and 10 growth investments (16.7%), representing a decline from the previous month.
Healthcare services have recently seen an unexpected dip in deal activity. In the second quarter of 2023, an estimated 164 deals were recorded or announced, according to PitchBook. This represents the sixth straight quarter of deal count declines, and the lowest number of deals since the second quarter of 2020.[1]
The primary cause for declining deal activity has been leverage, with heavily indebted companies “straining under debt service costs and impending maturity walls.”[2]
Dental Care
July was an active month for dental care acquisitions, led primarily by private equity-backed company Smile Doctors, which describes itself as the fastest-growing orthodontist network in the U.S.[3] The company has been very active in 2023, and had already acquired more than 20 clinics in the first four months of the year.[4] It currently has more than 400 locations in 28 states.[5]
In July, Smile Doctors made at least five add-on acquisitions, including dental practices in Alabama, Arkansas, Georgia, Ohio, and Texas.[6] The company also raised $550 million in funding in July, which will support the company’s continued growth.[7]
Smile Doctors has been owned by private equity firm Linden Capital Partners since October 2017.[8] In early 2022, private equity firm Thomas H. Lee Partners announced it would invest in the Smile Doctors in equal partnership with Linden.[9] Smile Partners was at the time valued at $2.4 billion.[10]
In February, one Smile Doctors co-founder said that about 7% of orthodontists are partnered with dental support organizations (DSOs) such as Smile Doctors. Currently, Smile Doctors-affiliated practices are estimated to account for about 3.5% of the orthidic market.[11]
Though DSOs like Smile Doctors make up a relatively small portion of the dental market, that number is steadily increasing. DSOs are overwhelming owned by private equity firms; a 2021 report by PESP found that 27 of the top 30 DSOs are PE-owned.[12]
Health IT
July was also an active month for Health IT acquisitions, which describes software used by healthcare providers and payers. Healthcare IT includes technology to produce and track clinical data, claims data, and administrative data. Much healthcare IT investment has been focused on data cleaning, integration, and exchange.[13]
In July, private equity firm Thoma Bravo bought and merged two IT companies, Bluesight and Medacist, which focus on using data to address drug diversion (i.e., the illegal distribution or abuse of prescription drugs).[14]
Bluesight provides “unit-level visibility of pharmaceutical products from manufacturing plant to patient.”[15] The company examines data from health systems across the U.S. to identify types of drug diversion that may be occurring in hospital pharmacies.[16] Medacist provides a similar drug diversion prevention platform.[17]
A recent study found that “[d]rug losses and theft from the healthcare system are accelerating,” and that hospitals are under pressure to address this growing concern.[18] Health professionals may divert prescription drugs for recreational purposes, relief of addictions, monetary gain, self-medication, and other reasons.[19] According to one 2016 estimate, drug diversion costs the healthcare industry approximately $72.5 billion per year.[20]
The merger between Bluesight and Medacist creates a company serving more than 2,000 hospitals and approaching $500 million in annual revenue.[21]
Buyouts
Companies |
Company Type |
Type 2 |
PE Firm(s) |
| 49 Mile Orthodontics | Outpatient care | dental care | Footbridge Partners, Peterson Partners |
| Biomerics | Medtech | medical device manufacturing | ONCAP, Wasatch Equity Partners |
| Bluesight | Health IT | supply chain management | Thoma Bravo |
| Eldertree | Healthcare administration | elder care and management | Bolivar Progress Partners, Pacific Lake Partners |
| Veridian Healthcare | Medtech | medical supplies manufacturing | United Western Group, HealthEdge Investment Partners |
Add-on acquisitions
Companies |
Company Type |
Type 2 |
PE Firm(s) |
Add-on Platform |
| AMCR Institute | Clinical research | KKR | Headlands Research | |
| Attentive Home Healthcare | Home health | Lorient Capital Management | PurposeCare | |
| Blackburn Family Orthodontics | Outpatient care | dental care | Thomas H. Lee Partners, Linden Capital Partners | Smile Doctors |
| Blacktrace | Medtech | The Carlyle Group | Unchained Labs | |
| Capital Solution Design | Health IT | medical records software | SEMCAP Health | NeuroFlow |
| Cardiovascular Associates | Outpatient care | cardiology | MedEquity Capital, Webster Equity Partners | Cardiovascular Associates of America |
| Collab Infotech | Health IT | DW Healthcare Partners | Aequor Healthcare Services | |
| CompMed | Health IT | revenue cycle management | Grant Avenue Capital | QHR Health |
| Devana Solutions | Health IT | clinical research | LLR Partners | RealTime Software Solutions |
| DSG | Health IT | healthcare data software | Foresite Capital Management, Genstar Capital, Harvest Partners | Signant Health |
| Eastern Carolina Emergency Physicians | Healthcare administration | emergency department management | Regal Healthcare Capital Partners, Varsity Healthcare Partners | Emergency Care Partners |
| Gastroenterology Of Greater Orlando | Outpatient care | gastroenterology | MD Healthcare Partners, Vesey Street Capital | Gastro MD |
| Genpro Research | Healthcare consulting | clinical trials | QHP Capital | Catalyst Clinical Research |
| Jet Health Solutions | Health IT | insurance automation platform | Bain Capital Insurance | Enhance Health |
| Kova International | Medtech | urinalysis products | Cinven, Astorg | LGC |
| Lake Dermatology | Outpatient care | dermatology | LLR Partners, SV Health Investors, LNK Partners | Schweiger Dermatology Group |
| Lee Silsby Compounding Pharmacy | Pharmaceuticals | specialty pharmacy – compounding pharmacy | Osceola Capital Management, Hall Capital Holdings | Revelation Pharma |
| MarsdenAdvisors (Merit-Based Incentive Payment System business unit) | Health IT | payment system management | Atlantic Street Capital | Anatomy IT |
| Mass Medical Storage | Medtech | medical supplies manufacturing | Levine Leichtman Capital Partners | Capsa Healthcare |
| Medacist | Health IT | drug diversion prevention platform | Thoma Bravo | Bluesight |
| Medxoom | Health IT | revenue cycle management | Stone Point Capital | Allied Benefit Systems |
| Mid State Orthopaedic & Sports Medicine Center | Outpatient care | orthopaedics | Thurston Group, FFL Partners | Mississippi Sports Medicine |
| NextPhase Medical Devices | Medtech | contract manufacturing services | Investindustrial | Arterex |
| Open Doors | Home health | Seven Hills Capital, Tenth Street Capital | VersiCare Group | |
| Ophthalmic Surgical Solutions | Medtech | surgical devices | Pharos Capital Group | Vantage Outsourcing |
| Orthopaedic Associates of New Orleans | Outpatient care | orthopaedics | Thurston Group, FFL Partners | Mississippi Sports Medicine |
| OutcomesMTM | Healthcare consulting | medication therapy management | BlackRock LTPC | Transaction Data Systems |
| Peach Orthodontics | Outpatient care | dental care | Resolute Capital Partners, Latticework Capital Management | Salt Dental Collective |
| Priority PICC Solutions | Outpatient care | vascular access company | RiverGlade Capital | Dynamic Access |
| Pure Dental Brands (Part Virginia Operations) | Outpatient care | dental care | The Beekman Group | Riccobene Associates Family Dentistry |
| Pure Dental Brands (Pediatric Dentistry Operations) | Outpatient care | dental care | Tailwind Capital | Lone Peak Dental Group |
| Quanta BioDesign | Biotech | Thompson Street Capital Partners, Audax Group | Vector Laboratories | |
| Refined Aesthetics | Outpatient care | skin treatment | Thurston Group | Alpha Aesthetics Partners |
| RMA of New York | Laboratory services | assistive reproductive technology | Amulet Capital Partners | US Fertility |
| Scott’s Home Health Care | Home health | Lorient Capital Management | PurposeCare | |
| Smiles of Ohio | Outpatient care | dental care | Thomas H. Lee Partners, Linden Capital Partners | Smile Doctors |
| Smith Smiles Orthodontics | Outpatient care | dental care | Thomas H. Lee Partners, Linden Capital Partners | Smile Doctors |
| Southboro Dental Associates | Outpatient care | dental care | The Jordan Company | Dental365 |
| Southern Indiana ENT | Outpatient care | ear, nose, and throat | Candescent Partners, Harvey & Company | ENT Partners |
| Suburban Research Associates | Clinical research | Beecken Petty O’Keefe & Company, PNC Erieview Capital | Atlas Clinical Research | |
| Teaching Transitions | Healthcare education | Cressey & Company | Home Care Pulse | |
| Vero ENT Associates | Outpatient care | ear, nose, and throat | Audax Group | Elevate ENT Partners |
| Weaver Orthodontics | Outpatient care | dental care | Thomas H. Lee Partners, Linden Capital Partners | Smile Doctors |
| Weissman Orthodontics | Outpatient care | dental care | Thomas H. Lee Partners, Linden Capital Partners | Smile Doctors |
| ZOIA Pharma | Medical food | Wellspring Capital Management | Pentec Health |
Growth Investments*
*some investments have undisclosed investors
| Companies | Company Type | Type 2 | Deal Type | PE Firm(s) |
| Brainlab | Health IT
| PE Growth/Expansion | EMH Partners | |
| EchoNous | Medtech | ultrasound technology | PE Growth/Expansion | Kennedy Lewis Investment Management |
| GPS Dental | Outpatient care | dental care | PE Growth/Expansion | (undisclosed) |
| Home Instead | Home health | PE Growth/Expansion | Ashbridge Partners | |
| Medaxion | Health IT | anesthesia information platform | PE Growth/Expansion | McCarthy Capital |
| Mountain Land Physical Therapy | Outpatient care | physical therapy | PE Growth/Expansion | Clairvest Group |
| PaceMate | Health IT | cardiac monitoring | PE Growth/Expansion | Lead Edge Capital |
| Smile Doctors | Outpatient care | dental care | PE Growth/Expansion | (undisclosed) |
| Trumpet Behavioral Health | Behavioral health | PE Growth/Expansion | Balance Point Capital | |
| Vi Living | Home health | PE Growth/Expansion | PSP Capital Partners | |
| Brainlab | Health IT | PE Growth/Expansion | EMH Partners |
[1] PitchBook. “Q2 2023 Healthcare Services Report,” p. 3, August 11, 2023. https://pitchbook.com/news/reports/q2-2023-healthcare-services-report.
[2] PitchBook. “Q2 2023 Healthcare Services Report,” p. 3, August 11, 2023. https://pitchbook.com/news/reports/q2-2023-healthcare-services-report.
[3] Smile Doctors. “Smile Doctors Orthodontists | Smile With Confidence.” Accessed August 22, 2023. https://smiledoctors.com/.
[4] Private Equity Stakeholder Project. “Private Equity Health Care Acquisitions – April 2023,” May 22, 2023. https://pestakeholder.org/news/private-equity-health-care-acquisitions-april-2023/.
[5] Smile Doctors. “Why Smile Doctors? | Over 300 Trusted Locations in 25 States.” Accessed August 22, 2023. https://smiledoctors.com/why-smile-doctors/.
[6] Group Dentistry Now. “DSO Deal Roundup – July 2023,” August 1, 2023. https://www.groupdentistrynow.com/dso-group-blog/dso-deal-roundup-july-2023/.
[7] Cision PR Newswire. “Smile Doctors Raises Over $550 Million in Funding as the Organization Continues Strategic Growth in Q2 2023,” July 19, 2023. https://www.prnewswire.com/news-releases/smile-doctors-raises-over-550-million-in-funding-as-the-organization-continues-strategic-growth-in-q2-2023-301881013.html.
[8] Linden Capital Partners. “Smile Doctors.” Accessed August 22, 2023. https://www.lindenllc.com/portfolio/investments/current/smile-doctors/.
[9] THL. “Smile Doctors Receives Strategic Investment from Thomas H. Lee Partners,” January 5, 2022. https://thl.com/articles/smile-doctors-receives-strategic-investment-from-thomas-h-lee-partners/.
[10] Sarah Pringle. “Scoop: THL Buys into Smile Doctors at $2.4 Billion Valuation.” Axios, December 23, 2021. https://www.axios.com/2021/12/23/thl-investment-kicks-off-smile-doctors-deal.
[11] Megan Farrer. “Dallas-Based Orthodontic Service Provider Smile Doctors Raises $550 Million from Investors.” Dallas Morning News, July 20, 2023. https://www.dallasnews.com/business/health-care/2023/07/20/dallas-based-orthodontic-service-provider-smile-doctors-raises-550-million-from-investors/.
[12] Eileen O’Grady, “ Private Equity Drills into Dental Care,” Private Equity Stakeholder Project, July 2021. https://pestakeholder.org/wp-content/uploads/2021/08/PESP_DSO_July2021.pdf
[13] PitchBook. “Q4 2022 Launch Report: Healthcare IT,” March 2, 2023. https://pitchbook.com/news/reports/q4-2022-launch-report-healthcare-it.
[14] Thoma Bravo. “Thoma Bravo Announces Strategic Growth Investment in Bluesight to Support the Company’s Acquisition of Medacist.” Cision PR Newswire, July 17, 2023. https://www.prnewswire.com/news-releases/thoma-bravo-announces-strategic-growth-investment-in-bluesight-to-support-the-companys-acquisition-of-medacist-301878136.html.
[15] Business Wire. “Medication Intelligence Leader Kit CheckⓇ Rebrands as BluesightⓇ,” December 5, 2022. https://www.businesswire.com/news/home/20221205005565/en/Medication-Intelligence-Leader-Kit-Check%E2%93%87-Rebrands-as-Bluesight%E2%93%87.
[16] Bluesight. “Diversion Quarterly Q4, 2022,” January 2023. https://bluesight.com/resource/diversion-quarterly-q4-2022/.
[17] Medacist. “Medacist | Lead Drug Diversion Solutions Provider.” Accessed August 22, 2023. https://medacist.com.
[18] Mark Fan, Dorothy Tscheng, Michael Hamilton, Bridgett Hyland, Rachel Reding, and Patricia Trbovich. “Diversion of Controlled Drugs in Hospitals: A Scoping Review of Contributors and Safeguards.” Journal of Hospital Medicine 14, no. 7 (2019): 419–28. https://doi.org/10.12788/jhm.3228.
[19] U.S. Department of Health & Human Services. “Drug Diversion: What Is a Prescriber’s Role in Preventing the Diversion of Prescription Drugs?,” February 2016. https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/DrugDiversionFS022316.pdf.
[20] Pharmacy Times. “The High Cost of Drug Diversion,” January 4, 2016. https://www.pharmacytimes.com/view/the-high-cost-of-drug-diversion.
[21] Aaron Weitzman. “Thoma Bravo Merging Bluesight, Medacist.” Axios, July 17, 2023. https://www.axios.com/pro/health-tech-deals/2023/07/17/thoma-bravo-goes-all-in-on-drug-diversion-inventory-management-and-compliance.
