American Veterinary Group said to go to Oak Hill Capital, IBM weighs sale of IBM Watson Health, Jim Momtazee’s new healthcare fund could break records

Oak Hill Capital to rejoin the veterinary care space and IBM mulls potential sale of its IBM Watson Health business

Morning, everybody!

Healthcare for your pets: Oak Hill Capital appears to be getting back into the popular veterinary care space after quietly exiting a stake in a larger industry asset last year, people familiar with the matter told PE Hub.

The New York private equity firm is said to have put a quick stop to the auction for private equity-backed American Veterinary Group, preempting a Harris Williams-run sale process at the IOI stage, the people said.

Oak Hill makes a logical buyer for the company, with deep roots in animal health. While not yet announced, the firm in 2020 sold its investment in one of the country’s largest vet care chains, VetCor – generating a nice gain after a short hold, four sources said.

In 2005, the theme-based firm combined two companies to create Butler Animal Health Supply, which later merged with Henry Schein’s US animal-health business to form Butler Schein Animal Health. Oak Hill in 2012 exited its investment in full.
Check out my full report here.

Carve-out opportunity: The Wall Street Journal reports that IBM is exploring a potential sale of its IBM Watson Health business, citing people familiar with the matter. The decision comes as the technology giant’s new chief executive moves to streamline the company and become more competitive in cloud computing, the report said.

The process could produce a transaction with another industry player, a SPAC or private equity, it said. IBM paid around $2.6 billion for Truven in 2016, almost $1 billion for Merge Healthcare in 2015 and around $230 million for Phytel, according to FactSet – all of which are among the health-related acquisitions that today make up IBM Watson Health. Read more here.

Watch out: As PE Hub has written recently, ex-KKR healthcare chief Jim Momtazee has been building out an impressive roster at his new healthcare-focused private equity shop – most recently adding former Ares Management and KKR investors to the team.
Now, sources told Buyouts, Patient Square is telling potential investors it could raise around $3 billion for its debut pool of capital – which would represent one of the largest-ever first-time private equity funds in history.

This is particularly noteworthy, as emerging managers generally have a harder time attracting capital from limited partners until they are able to establish a track record. Read more on Buyouts.

That’s it for today! Have a great weekend, readers, and in the meantime, hit me up with feedback, tips n’ gossip or whatever at springle@buyoutsinsider.com.