6 PE-backed deals that aim to solve staffing shortages in healthcare

Thoma Bravo, One Equity Partners and HIG are among the PE firms eagerly snatching up healthcare staffing providers in this hot market.

The covid pandemic underscored the urgency of nursing shortages at hospitals and other staffing challenges throughout the healthcare and life sciences industries. Private equity firms have been quick to seize on the problems as opportunities to invest in companies that focus on human capital in healthcare.

Over the last six months, PE Hub has covered many PE-backed deals involving healthcare and life sciences staffing. Here are six recent deals that caught our attention (in reverse chronological order):

1. Orangewood invests in Barrington James

In early October, Orangewood Partners made an investment in Barrington James, a Crawley, West Sussex, UK-based global recruitment business that serves the pharmaceutical, biotechnology and medical device sectors.

Neil Goldfarb, managing partner of Orangewood, shared the strategy behind the deal with affiliate title PE Hub Europe.

Barrington James operates in the “highly attractive and growing life sciences sector, helping highly skilled professionals and companies come together,” Goldfarb said.

Positions in the life sciences industry “require significant industry knowledge and an understanding of the needs of these very specialized and technical businesses,” he said. “Naturally, the pandemic put a large spotlight on the life sciences and biopharma sectors, which we think are going to continue to attract interest and investment over the long term.”

He noted that staffing is a “long-term pain point for companies. The labor force continues to become more transient and, with work-from-home here to stay, we believe these trends will only accelerate in the future.”

2. OEP purchases Prime Time Healthcare

In September, One Equity Partners announced that the New York-based firm had acquired Prime Time Healthcare, a healthcare staffing services provider. Headquartered in Omaha, the company specializes in the placement of registered nurses and other practitioners and professionals in facilities across the country.

Prime Time is poised to be a consolidator in the “highly fragmented” healthcare industry, Charlie Cole, principal, OEP, told PE Hub.

“We’ve been looking at healthcare staffing for some time. because the fundamentals suggest that staffing companies will be an increasing part of the healthcare labor ecosystem,” explained Cole. “The pandemic exacerbated existing clinician shortages, and we don’t see those easing anytime soon. Take nursing – estimates suggest the US could be at an RN deficit of almost 500,000 by 2025. Moreover, shortages are not nursing-specific.”

3. HIG buys Barton & Associates

In August, Miami-based HIG Capital announced the acquisition of Peabody, Massachusetts-based Barton & Associates, which provides temporary staffing services.

Barton “plays a critical role in matching premier talent with healthcare facilities across the country,” said Mike Gallagher, managing director, HIG. “We believe the Barton organization is well-positioned for continued growth, given its consistent dedication to high quality and timely solutions that provide continuity of care to its customers.”

4. HCAP backs FleetNurse

Back in May, HCAP Partners made an investment in FleetNurse, a provider of on-demand healthcare staffing services.

FleetNurse’s software connects healthcare professionals with healthcare facilities that need to staff shifts on short notice. Administrators can use the service to broadcast available shifts to a large pool of credentialed healthcare workers, allowing facilities to fill shifts within an hour’s notice.

“Using the same technology that disrupted and optimized ride sharing, vacation rentals, and many other segments of the modern economy, the company has created a powerful software solution to efficiently match high-quality nurses to facilities in both the acute and post-acute markets,” said Nicolas Lopez, principal, HCAP.

5. Thoma Bravo invests $60m in Vivian Health

Also in May, Thoma Bravo made a $60 million investment in Vivian Health, which Thoma Bravo principal Christine Kang likened to the LinkedIn of the healthcare sector.

“This is an exciting business model for us because, ultimately, this is a supply-constrained market,” Kang told PE Hub. “So, whoever is able to win the most supply, the most engaged supply, is incredibly well-positioned to service all types of healthcare employers.”

Last year Vivian filled 15 percent of all travel nursing positions, according to Kang.

6. PE-backed Ingenovis Health acquired VISTA

In April, Ingenovis Health, which is backed by Cornell Capital and Trilantic North America, acquired VISTA Staffing Solutions from Envision Physician Services.

“One of the most critical nationwide challenges we will face in the coming years will be the shortage of experienced healthcare providers, and we are doing everything we can to be part of the solution,” said Bart Valdez, CEO of Ingenovis Health.

The need for healthcare staffing services is not going away anytime soon, and PE Hub expects to see many more deals in the future.