May 2024 was an active month for the private equity (PE) healthcare M&A market. LevinPro HC data shows that approximately 36% of healthcare deals announced during the month (53 of 146) involved PE acquirers and/or their portfolio companies. Although this is a small decline from May 2023, when 42% of healthcare deals announced involved PE, it is still a slight increase from the 35% of private equity transactions announced during April 2024.
This report dives into some of the most significant PE transactions in healthcare during May 2024, highlighting the key PE players and/or their portfolio companies and their recent moves in the healthcare M&A market.
KKR:
KKR remained a major player in the healthcare space in May 2024, with significant activity both through its own acquisitions and those made by its portfolio companies.
Brightspring Health Services, a Louisville, Kentucky-based provider of comprehensive home and community-based health services to complex populations, made three acquisitions during the month, all announced on the same day. On May 22, the company acquired a home and community pharmacy in Texas, a home-based primary care group in Arkansas and an institutional special needs health plan in Kentucky and Tennessee.
Although Brightspring has mostly made acquisitions in the Home Health and Hospice (HH&H) sector in the past, the company showed during May that it’s willing to make acquisitions in different verticals as well, including specialty pharmacies and managed care.
Another KKR-backed company, Heartland Dental, announced two acquisitions in Ohio during May 2024. Headquartered in Effingham, Illinois, Heartland Dental is a dental support organization providing non-clinical, administrative support services with more than 2,600 doctors in more than 1,650 locations across 38 states. At the start of the month, the company picked up Macedonia Dental Arts, a dental practice with one location in Macedonia, Ohio. Hearltland Dental followed that up with the purchase of Lake West Dental, a family and cosmetic dental practice located in Willoughby Hills, Ohio.
KKR also added a new company to its portfolio during May. The company acquired Healthium MedTech, a leading medical device company in India. PE firm Apax Partners previously acquired the company in 2018. The exact purchase price of the transaction was not disclosed, but three sources with direct knowledge of the matter say it is valued at 70 billion rupees (approximately $838.6 million USD).
Charlesbank Capital Partners:
During May 2024, Charlesbank Capital Partners-backed MB2 Dental Solutions announced six acquisitions across the dental specialty.
MB2 Dental Solutions partners with dentists and specialists. Founded in 2007, MB2 offers general dentistry services, orthodontics, cosmetic dentistry and oral surgery.
MB2 kicked off the month with its acquisition of Scheich Family Dentistry in Castle Pines, Colorado, followed by the purchase of Potach & Mitchell Dental Clinic in Austin, Minnesota, Cosmetic & Implant Dentistry of La Jolla in La Jolla, California, CopperMine Dental Studio with two locations in Arizona, Graig D. Brown Periodontics & Implant DDS in Tucson, Arizona and Lowry Endodontics in Denver, Colorado.
MB2 has historically been quite active in the dental specialty since its first in 2017. Charlesbank acquired the company in 2021, and since then, the company has announced 137 transactions across the United States. MB2 announced 59 transactions during 2023. With 30 transactions announced during the first five months of 2024, it’s already looking like MB2 may outpace its performance last year and maintain its spot as one of the most active acquirers in not just dental, but the entire healthcare M&A market.
Quad-C Management:
Quad-C Management‘s portfolio company Specialized Dental Partners (SDP) had an active May, with four transactions announced in the dental specialty.
SDP is a leading specialty dental service organization that provides comprehensive support services to endodontic specialists across the United States. The company is backed by Quad-C Management, a PE firm founded in 1989 and headquartered in Charlottesville, Virginia.
During May 2024, Specialized Dental Partners acquired Life Dental Specialties in Massachusetts, Mesa Implants & Periodontics and Chandler Implants & Periodontics in Arizona and Fayette Endodontics in Georgia.
SDP has announced 34 acquisitions since February 2020, and eight since the start of 2024. Alongside Massachusetts, Arizona and Georgia, the company has also expanded its footprint in California, Mississippi, Ohio and Illinois during the first five months of the year. This indicates a strategic approach to building a comprehensive network of specialists across the country.
Great Point Partners:
Great Point Partners (GPP), a PE firm based in Greenwich, Connecticut, reported acquisitions from two of its portfolio companies.
On the first day of May 2024, GPP-backed Family Resource Home Care, one of the largest independent home care services providers in the Pacific Northwest, announced its acquisition of Specialty Service Solutions, based in Moses Lake, Washington. Specialty Service Solutions is a private in-home care agency licensed by the Washington State Department of Health.
Family Resource CEO Hector Barragan said in a statement, “Specialty Service Solutions is a fantastic addition to our growing Moses Lake operation. We’ve been aware of their strong presence and reputation in the market for quite some time and the ability to integrate them into our company is an honor… Their team brings additional market intelligence and expertise that will be valuable as we continue to expand our services in central Washington.”
Just a day later, on May 2, 2024, GPP-backed Ephicacy Consulting Group announced the purchase of Advance Research Associates (ARA) in Santa Clara, California. Founded in 1996, ARA is a contract research organization partner that provides biostatistical and data management services to the Pharmaceutical, Biotechnology and Medical Device industries. ARA has supported more than 700 clinical trials for domestic and international clients across diverse therapeutic areas.
GPP has backed 29 transactions since its first in 2012. Although its healthcare M&A strategy has slowed in recent years, with only one acquisition announced by a portfolio company during 2023, and none announced during 2022, GPP has shown that it’s not done yet with its latest round of acquisitions.
Silver Oak Services Partners:
Silver Oak Services Partners, a lower middle market PE firm focused on making investments in leading business, consumer and healthcare services companies, had two of its portfolio companies announce acquisitions during May 2024.
On May 2, Silver Oak-backed Smile Partners USA announced the purchase of Family Dental Group, a family dental practice in Decatur, Georgia with four providers on staff. Smile Partners USA is a management support organization that offers back-office resources and services to premier, independent private dental practices and boutique group practices throughout Michigan, Georgia, Illinois and Alabama. It has been backed by Silver Oak since July 2017.
Also on May 2, Silver Oak’s portfolio company Integrated Oncology Network (ION) announced its acquisition of Urology Partners, a private practice group providing urologic care in the Cleveland, Ohio community for more than 50 years. According to its website, the practice has three providers on staff.
ION is a physician management, radiation oncology management and cancer center development company that partners with physicians, hospitals and other healthcare providers. Founded in 2008 and backed by Silver Oak since October 2018, ION has grown to more than 60 centers across the country, providing a complete and integrated continuum of care, including diagnostic testing, radiation oncology, medical oncology, urology and other ancillary services.
“With Urology Partners, LLC now part of our network, we can offer a larger footprint and expanded urologic healthcare services to the greater Cleveland area,” Barry Tanner, CEO of Integrated Oncology Network, said. “This partnership underscores our commitment to deliver comprehensive, top-tier care in our communities.”
According to data captured in the LevinPro HC database, Silver Oak and its portfolio companies have announced 26 acquisitions since October 2017. The company predominately invests in the Rehabilitation, HH&H and Physician Medical Group (PMG) sectors. Although there were no acquisition announcements made during 2023, and just one made during 2022, Silver Oak and its portfolio companies have already kicked off the first five months of 2024 with four acquisitions.
Thomas H. Lee Partners:
Thomas H. Lee Partners (THL) announced the largest PE transaction by disclosed purchase price during the month of May.
On May 7, the Boston-based PE firm announced its acquisition of publicly traded Agiliti, Inc. for a total enterprise value of $2.5 billion. This also marked the eighth largest transaction of the year across all healthcare verticals so far.
Agiliti is an essential service provider to the U.S. healthcare industry with solutions that help support a more efficient, safe and sustainable healthcare delivery system. The company has served more than 10,000 national, regional and local acute care and alternate site providers across the country.
Since 1974, THL has raised more than $34 billion of equity capital, invested in more than 160 companies and completed more than 500 add-on acquisitions representing an aggregate enterprise value of more than $210 billion.
As a result of the closing of the transaction, trading of Agiliti common stock has been suspended on the New York Stock Exchange and Agiliti has requested that its common stock be delisted from the NYSE.
According to data captured in the LevinPro HC database, THL and its portfolio companies have announced 26 healthcare transactions since 2013 across a large variety of specialties, including PMG, eHealth, Medical Devices, Rehabilitation, HH&H and more.
GTCR:
GTCR, a leading PE firm with a long track record of investment expertise across healthcare and healthcare technology, ended the month with a large purchase of its own. The Chicago-based PE firm entered into a definitive agreement to acquire Surmodics, Inc. for a total equity valuation of approximately $627 million.
Surmodics is an Eden Prairie, Minnesota-based provider of performance coating technologies for intravascular medical devices and chemical and biological components for in vitro diagnostic immunoassay tests and microarrays. Surmodics also develops and commercializes highly differentiated vascular intervention medical devices. According to its most recent financial report, Surmodics’ revenue during FY 2023 was $132.6 million, and EBITDA was $14.5 million.
Gary Maharaj, President and CEO of Surmodics, Inc., said, “[the transaction] enables Surmodics shareholders to realize immediate value creation with a substantial premium, reflecting the significant progress and important achievements made by our employees.”
He continued, “GTCR is an ideal partner for Surmodics, given its extensive history and deep domain expertise in the Healthcare sector, and I am confident that this transaction will position the company to continue to deliver compelling benefits for physicians, patients and customers going forward.”
Upon completion of the transaction, which is expected in the second half of 2024, Surmodics will be a privately held company and its common stock will no longer be listed on the NASDAQ.
This marks GTCR’s first acquisition of the year, and its fifth acquisition since March 2022. Additionally, GTCR’s portfolio companies have announced 30 deals since 2016, with six announced during 2023.
