M&A Transactions

Welsh Carson, TPG and Humana go after a second home health operator, Curo Health Services, paying $1.4B

On the heels of a similar deal where WCAS, TPG and Humana jointly purchased Kindred for over $4.1B, the consortium is doing it again. The strategic/financial sponsor partnerships are great ways to de-risk transactions.

Curo has 245 locations in 22 states. Humana will have ongoing ownership of 40% in the company. Once the two transactions are closed, the consortium intends to merge the two operations with the exception of Kindred’s home health unit.

GE Healthcare IT unit is sold to Veritas Capital for $1.05B

Veritas takes big bets. The company was an investor in Truven Health and is a current investor in Verscend.  The transaction covers GE’s RCM, ambulatory care and workforce management software unit.

The sale is part of the broader restructuring of GE. The company is a leader in imaging equipment but unfortunately it never found its “north” on the IT side of healthcare. We are certain that Veritas will do a better job in managing those assets.

Altaris capital buys publicly-held Analogic, medical imaging system manufacturer and based in Peabody, MA, for $1.1B

Take private companies in healthcare are few and far between. Analogic is an established player in the iron bending part of imaging such as ultrasound machines. The company is also a parts manufacturer for CT and MRI machines. Analogic’s second business is in the area of security systems used in airports and other settings. Price represented a 25% premium.

Altaris is an experienced hand in investing in medical devices. We are confident that the company will do well under the stewardship of Altaris’ professionals.

Netsmart Technologies, backed by GI Partners and Allscripts acquires Change Healthcare’s Home Care and Hospice Solutions

This is an asset which used to be owned by McKesson and a good example of a strategic buyer joining hands with a financial investor. We like that model. Netsmart is an IT provider primarily for community-based hospitals which could be ideal referral agents for the post acute market. Netsmart has 1,300 connected labs and processes more than 10 million clinical transactions per year.

Great Hill Partners majority recaps Vatica Health of Nashville, TN

Great Hill is one of the savviest PE firms in healthcare. Vatica’s software and solutions help providers and payers to engage in value-based care through risk scoring. Submitting compliant risk adjustment codes for VBR is increasingly complex. Companies  need to bring information from many disparate sources; not an easy task in our healthcare environment.

Humana buys at-risk provider, Family Physician Group based in Orlando, FL

Target is well known in the Medicare Advantage market as well as Managed Medicaid market. The latter is starting to  become an important business for many providers. FPG has 22 locations serving 20,000 patients (4,000 of them are Humana members)

This is another good example of the lines between insurers and providers coming closer together. What is intriguing to us is the heightened M&A activity of Humana. In the last 90 days, the company has been involved in three large M&A transactions while the rumors of a takeover by Walmart is ongoing.

OraMetrix of Richardson, TX, is acquired by NASDAQ-listed Dentsply Siroma

The target is a leading provider of 3D technology for the orthodontic care with $20M in revenue. The buyer is the world’s largest manufacturer of professional dental products and technologies with $11B in market cap and annual sales exceeding $4.0B.

Triplefin, based in Cincinnati, OH is purchased by JLL Partners and Water Street Healthcare Partners

The company develops patient access and adherence brand solutions for pharma companies. It allows providers and patients to access prescription benefit information through an integrated platform. For example the platform is able to verify benefits, process prior authorization and activate cards for patients and providers.

SCI Solutions buys patient engagement company DatStat of Seattle, WA

The buyer provides patient access and care coordination software. SCI has over 13,000 physician practices and 1,000 hospitals and imaging centers in 350 markets. DatSat uses a secured messaging platform which enables patients to message providers and complete pre-visits forms. The platform also allows patients to fill out surveys, make and cancel appointments and do follow ups. This is a clever deal for Wicks Group/NEA-backed SCI. It closes the loop between providers and patients for care coordination.

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