New Enterprise Associates (NEA) has a strong healthcare portfolio, filled with digital health, population health management and physician practices. On June 6, the private equity firm added another physician group, Paladina Health, for a reported $100 million.
It’s not surprising that the bidding was “highly competitive,” according to a CNBC source, and that there were other private equity firms in the process. What is interesting is the nod that “a large retailers and pharmacy chain” was also in the hunt. Hello, CVS Health (NYSE: CVS)?
Paladina Health, a subsidiary of DaVita Inc. (NYSE: DVA), is a primary care practice with 53 clinics in 10 states. It operates on the direct primary care (DPC) model, receiving monthly retainers from employers rather than accepting insurance.
NEA categorizes this acquisition as a growth investment, positioning Paladina for growth in the DPC market. Paladina joins NEA’s other physician groups, American Pathology Partners (acquired in 2008), Radiology Partners (2012). and U.S. Renal Care (2015).
This transaction follows DaVita’s divestiture of its 30,000-physician group to UnitedHealth Group‘s Optum (NYSE: UNH) in December 2017 for $4.9 billion.