Private Equity Healthcare Acquisitions – September 2023
October 26, 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 September 2023. We will continue to track acquisitions on a monthly basis.
See August 2023 acquisitions here.
See all our 2022 acquisitions updates here.
In September 2023, there were 45 private equity deals in healthcare – 8 buyouts, 31 add-on acquisitions, and 6 growth investments, about a 40 percent decrease from the 77 deals tracked in September 2022.[1] Overall, 2023 has seen depressed private equity deal activity in healthcare, largely due to high interest rates that have increased the cost of debt-funded acquisitions and other macro-economic trends such as wage inflation.[2][3]
Even amidst the lull in deal-making, September saw two high profile take-privates in healthcare, and the announcement of one other. Two of these deals were in drug development-adjacent companies. See the table below for more details.
Take-private PE healthcare deals in September 2023
| Company | PE Firm(s) | Description |
| NextGen Healthcare | Thoma Bravo | Thoma Bravo announced on September 6 it had entered a definitive agreement to acquire NextGen Healthcare[4] in a deal valued at $1.8 billion.[5] NextGen is a healthcare software company that offers an Electronic Health Record (EHR) product and other healthcare administrative services to accountable care organizations, managed service organizations, and other groups. NextGen has clients in all 50 states and serves 100,000 providers.[6] |
| Paratek Pharmaceuticals | Novo Holdings; Gurnet Point | Novo Holdings and Gurnet Point closed on their acquisition of Paratek Pharmaceuticals for $462 million on September 21.[7] Paretek is a producer of antibiotics, with a focus on developing new products that can fight the growing problem of antimicrobial resistance.[8] |
| Syneos Health | Elliot Management; Patient Square Capital; Veritas Capital | First announced in May 2023, Elliot Management, Patient Square Capital, and Veritas Capital closed on their acquisition of Syneos Health on September 28[9] in a $7.1 billion all-cash deal.[10] Syneos Health is a contract research and outsourced commercialization organization operating within the biopharmaceutical sector.[11] |
Deals in the outpatient care sector
In terms of deal activity, outpatient care[12] was the hottest subsector in September. There were 10 add-on acquisitions and 1 growth investment across the specialties of allergy/immunology, cardiology, dental care, dermatology, eye care, and physical therapy.
Dental care had the greatest number of deals at four, each deal with a different group of investors. This subsector is seeing growing private equity involvement. Law firm McGuireWoods estimates that at least 100 dental services organizations (DSOs), and likely closer to 200, are private equity-owned.[13] DSOs are the platform companies that private equity firms use to rollup dental practices. These companies appear to have been created to avoid regulation that prohibits investor ownership of clinical practices.[14]
As PESP has previously reported, private equity investments in dental care can be cause for concern because the returns typically demanded by private equity investors may create risks to quality of care by incentivizing profit-driven practices that are harmful to patients, including overtreatment of patients, misleading advertising schemes, Medicaid fraud, and other problematic practices. [15]
Home care
Private equity firms have been investing in the home healthcare industry for many years,[16] but it appears firms are now also entering into the home care space. Home care differs from home healthcare in that it consists of non-medical services to assist with activities of daily living, such as getting dressed, meal preparation, and more.[17]
There were two home care private equity deals in September. The Halifax Group acquired Comfort Keepers, the home care division of Sodexo, for an undisclosed amount on September 29.[18] Comfort Keepers has over 700 locations across eight countries. Its U.S. business primarily provides private pay nonmedical personal care.[19][20]
In another deal, private equity firms Alpine Investors, Hamilton Lane, HarbourVest Partners, Neuberger Berman, Pantheon Capital Partners added on home care company Devoted Guardians to platform company, Team Services Group. Devoted Guardians also has a home health division in addition to its home care services.[22]
Private equity firms likely find home care attractive for a number of reasons. For starters, the US population is aging and there is a growing desire for Americans to age in place and receive care and healthcare services in the home, versus in assisted living and nursing facilities. In addition, home care companies do not have to compete for skilled nursing labor with other agencies and healthcare providers because their services are not medical in nature. Operational costs are likely lower, as well, since companies do not need as much overhead to process insurance reimbursements and comply with state and federal healthcare regulations.
As such, nonmedical home care is an industry to keep an eye on as private equity becomes a bigger player. The typical private equity strategy of capturing greater market power in fragmented industries by consolidation could have the effect up driving up the cost of home care services. With the typical private equity focus on short term profit, cost cutting strategies could lead to poor working conditions and pay for caregivers, which could in turn translate to higher turnover and quality of care issues for clients. And, because home care services are not medical care, there is a much looser regulatory environment. Many states do not require training or licensing for individual caregivers.[23] A loose regulatory environment could make it more difficult for home care companies to be held accountable in instances where clients receive poor quality of care.
September Buyouts
| Company | Company type | Secondary type | PE Firm(s) |
| Axovia Therapeutics | biotech | ALSA Ventures | |
| Syneos Health | contract research organization | outsourced commercialization organization | Elliott Management, Patient Square Capital, Veritas Capital |
| NextGen Healthcare (NAS: NXGN) | health IT | healthcare solutions platform for medical and dental practices | Thoma Bravo |
| Phlebotomy Training Specialists | healthcare education and training | Eden Capital | |
| Comfort Keepers (Home Care Division) | home care | The Halifax Group | |
| TracPatch Health | medtech | manufacturer of remote patient monitor devices | Granger Group |
| Paratek Pharmaceuticals (NAS: PRTK) | pharmaceuticals | Gurnet Point Capital, Novo Holdings | |
| Primal Harvest | wellness | herbal supplements manufacturer | WM Partners |
September Add-on Acquisitions
| Company | Company type | Secondary type | PE Firm(s) | Add-on Platform |
| Blake Pharmacy | pharmacy | Athyrium Capital Management, Kohlberg Kravis Roberts | PharMerica | |
| Controlled Environment Management | environmental testing | Levine Leichtman Capital Partners | Technical Safety Services | |
| Slayback Pharma | pharmaceuticals | pharmaceuticals manufacturing | QHP Capital | Azurity Pharmaceuticals |
| Healthjump | health IT | developer of a data management platform | Cigna Ventures, Flex Capital, Johnson & Johnson Innovation – JJDC, Mubadala Investment Company, Sixth Street Partners, The Goldman Sachs Group, Transformation Capital | Datavant |
| Lane Perio | outpatient care | dental care | Thurston Group | SGA Dental Partners |
| Lenkbar | medtech | contract manufacturing for medical devices | Montagu Private Equity | Intech |
| Medlogix Communications | medical communications | Five Points Capital, NaviMed Capital | CiTRUS Health Group | |
| Metzger Comprehensive Care | concierge medicine | Ascend Partners | Medical Specialists of the Palm Beaches | |
| Integrated Care Physicians | emergency medicine | Regal Healthcare Capital Partners, Varsity Healthcare Partners | Emergency Care Partners | |
| Delaware Valley Dermatology Group | outpatient care | dermatology | GarMark Partners, Regal Healthcare Capital Partners | The Dermatology Specialists |
| M8 Pharmaceuticals | pharmaceuticals | ADQ | Acino | |
| Allergy & Asthma Care of New York | outpatient care | allergy and immunology | LLR Partners, LNK Partners, RVM Enterprises Investment Group, Zenyth Partners | Schweiger Dermatology Group |
| Fident Health | telemedicine | Aquiline Capital Partners | Avel eCare | |
| Insight Vision Group | outpatient care | eye care | Waud Capital Partners | Unifeye Vision Partners |
| Thrive Alliance Group | disability services/behavioral health | Audax Group | New Story Group | |
| KISx Card | medical imaging contracting network | Guidon Partners, Kelso Private Equity | Vālenz | |
| Valley Clinical Trials | clinical research | operator of clinical research site | Barton Technology Ventures, New MainStream Capital | Flourish Research |
| Retina Consultants of Southern Colorado | outpatient care | eye care | Webster Equity Partners | Retina Consultants of America |
| Daytona Heart Group | outpatient care | cardiology | MedEquity Capital, Webster Equity Partners | Cardiovascular Associates of America |
| Medi-Tech International | medtech | medical supplies and equipment manufacturer | Supply Chain Equity Partners | MarketLab |
| 6 General Dental Practices In Eastern Pennsylvania | outpatient care | dental care | Regal Healthcare Capital Partners, The Jordan Company | Dental365 |
| Sunrise Dermatology | outpatient care | dermatology | Athyrium Capital Management, Gryphon Investors | Aqua Dermatology |
| Technical Prospects | medtech | supplier of aftermarket parts and servicing for medical imaging equipment | Mercury Partners, New MainStream Capital | DirectMed Parts & Service |
| Signature Dental Experience | outpatient care | dental care | New MainStream Capital | Cordental Group |
| Govise | healthcare consulting/medical communications | for medtech and pharma companies | WestView Capital Partners | Canopy (BPO/Outsource Services) |
| Urotronic | medtech | developer of medical device for men with UTIs | Patricia Industries | Laborie Medical Technologies |
| Brian S. Biesman, MD | aesthetics | cosmetic dermatology | ACE & Company, Persistence Capital Partners | MedSpa Partners |
| HME Business | industry publication | publisher of home medical equipment magazine | Mountaingate Capital | WTWH Media |
| Therapy Direct | outpatient care | physical therapy/occupational therapy | High Ridge Capital, Stone Point Capital, The Cambria Group | Enlyte |
| Devoted Guardians | home care | elder and disabled care | Alpine Investors, Hamilton Lane (NAS: HLNE), HarbourVest Partners, Neuberger Berman, Pantheon Capital Partners | Team Services Group |
| Diversified Health Care Management | healthcare administration | 001 Ventures, Archipelago Capital Partners, Sage Capital Partners, Silverstone Capital Holdings | ModuleMD |
September Growth/Expansion Investments
| Company | Company type | Secondary type | PE Firm(s) |
| Somafina | wellness/medtech | manufacturer of dietary supplements | Heartwood Partners |
| Lightwave | outpatient care | dental care – DSO | Undisclosed |
| Take Command | insurance/health IT | insurance management platform | Edison Partners, LiveOak Venture Partners, SJF Ventures |
| Haled | health IT | digital platform for healthcare administration | Undisclosed |
| Kinderfarms | wellness | producer of hydration drinks | Undisclosed |
| Elite Clinical Network | clinical research | Surge Private Equity |
[1] Bugbee, Mary. “Private Equity Health Care Acquisitions – September 2022.” Private Equity Stakeholder Project PESP (blog), October 17, 2022. https://pestakeholder.org/news/private-equity-health-care-acquisitions-september-2022/.
[2] Doshi, Justin, Jason Slocum, Benjamin Cooke, Nirad Jain, Kara Murphy, Franz-Robert Klingan, Dmitry Podpolny, Alex Boulton, and Vikram Kapur. “Healthcare Private Equity in a Downturn.” Bain, April 10, 2023, sec. Report. https://www.bain.com/insights/downturn-healthcare-private-equity-and-ma-report-2023/.
[3] Burleson, Emily. “Private Equity Healthcare Dealmaking Keeps Falling.” PitchBook (blog), September 28, 2023. https://pitchbook.com/news/articles/pe-healthcare-services-it-deals-2023.
[4] thomabravo.com. “NextGen Healthcare Enters into Definitive Agreement to Be Acquired by Thoma Bravo,” September 6, 2023. https://www.thomabravo.com/press-releases/nextgen-healthcare-enters-into-definitive-agreement-to-be-acquired-by-thoma-bravo.
[5] Landi, Heather. “Thoma Bravo to Buy Healthcare Software Company NextGen Healthcare in Take-Private Deal.” Fierce Healthcare, September 6, 2023, sec. Fierce Healthcare, Health Tech, Providers, Practices. https://www.fiercehealthcare.com/finance/thoma-bravo-buy-healthcare-software-company-nextgen-healthcare-take-private-deal.
[6] sec.gov. “NextGen Form 10-K for Year Ending March 31, 2023.” Accessed October 16, 2023. https://www.sec.gov/Archives/edgar/data/708818/000095017023023499/nxgn-20230331.htm.
[7]Reuters. “Novo Holdings, Gurnet Point Close $462 Million Acquisition of Paratek Pharmaceuticals.” September 22, 2023, sec. Deals. https://www.reuters.com/markets/deals/novo-holdings-closes-462-mln-acquisition-paratek-pharmaceuticals-2023-09-21/.
[8] “Paratek Pharma | Pipeline and Products.” Accessed October 4, 2023. https://www.paratekpharma.com/pipelineandproducts.
[9] syneoshealth.com. “Syneos Health Closes Transaction with Private Investment Firms | Syneos Health,” September 28, 2023. https://www.syneoshealth.com/news/releases/syneos-health-closes-transaction-private-investment-firms.
[10] O’Brien, Jack. “It’s Official: Syneos Health Goes Private in $7.1B PE Deal.” MM+M – Medical Marketing and Media, September 28, 2023. https://www.mmm-online.com/home/channel/agencies/syneos-health-goes-private/.
[11] Forbes. “Syneos Health | SYNH Stock Price, Company Overview & News.” Accessed October 12, 2023. https://www.forbes.com/companies/syneos-health/; “Who We Are | Syneos Health.” Accessed October 12, 2023. https://www.syneoshealth.com/who-we-are.
[12] PESP includes dental care under this category.
[13] McGuireWoods. “Pushing Upmarket: Consolidation of DSOs and Secondary Private Equity Sales,” May 5, 2023. https://www.mcguirewoods.com/client-resources/Alerts/2023/5/consolidation-dsos-secondary-private-equity-sales.
[14] O’Grady, Eileen. “Deceptive Marketing, Medicaid Fraud, and Unnecessary Root Canals on Babies: Private Equity Drills into the Dental Care Industry.” Private Equity Stakeholder Project, July 2021. https://pestakeholder.org/wp-content/uploads/2021/08/PESP_DSO_July2021.pdf.
[15] O’Grady, Eileen. “Deceptive Marketing, Medicaid Fraud, and Unnecessary Root Canals on Babies: Private Equity Drills into the Dental Care Industry.” Private Equity Stakeholder Project, July 2021. https://pestakeholder.org/wp-content/uploads/2021/08/PESP_DSO_July2021.pdf.
[16] Noble, Chris. “Private Equity at Home: Wall Street’s Incursion into the Home Healthcare and Hospice Industries.” Private Equity Stakeholder Project, March 2022. https://pestakeholder.org/wp-content/uploads/2022/03/Home-Healthcare-and-Hospice-report.pdf.
[17] Compassus. “How Is Home Health Care Different from Personal Care?” Accessed October 12, 2023. https://www.compassus.com/services/home-health/what-s-the-difference-between-home-health-care-and-home-care/.
[18] Donlan, Andrew. “The Halifax Group Acquires Home Care Franchise Comfort Keepers.” Home Health Care News, September 29, 2023. https://homehealthcarenews.com/2023/09/the-halifax-group-acquires-home-care-franchise-comfort-keepers/.
[19] Donlan, Andrew. “The Halifax Group Acquires Home Care Franchise Comfort Keepers.” Home Health Care News, September 29, 2023. https://homehealthcarenews.com/2023/09/the-halifax-group-acquires-home-care-franchise-comfort-keepers/.
[20] “Frequently Asked Questions About In-Home Care | Comfort Keepers.” Accessed October 12, 2023. https://www.comfortkeepers.com/care-services/faq/.
[21] “PitchBook Profile – Devoted Guardians.” Accessed October 12, 2023. https://my.pitchbook.com/profile/238132-90/company/profile.
[22] Devoted Guardians. “Phoenix Valley’s Leading Senior Home Care & Trusted Caregiver Agency.” Accessed October 12, 2023. https://devotedguardians.com/.
[23] “How To Become A Non-Medical Caregiver – MeetCaregivers,” May 27, 2021. https://meetcaregivers.com/non-medical-caregiver-overview/.
