Bain Capital Double Impact backs ConvenientMD, Berkshire’s Affordable Care awaits bids, TPG, Francisco’s Boomi reflects ‘growth buyouts’ trend

Berkshire Partners is exploring a sale of Affordable Care and Bain Capital Double Impact invests in ConvenientMD.

It’s hump day, hubsters.

For sale: Boston’s Berkshire Partners is exploring a sale of Affordable Care that could value the country’s largest dental support organization focused on tooth replacement at more than $2 billion, according to four people familiar with the firm’s plans. Swiss buyout firm Partners Group is a minority investor in Affordable Care through its debt platform, with the investors having partnered in 2015 to acquire the business in an $825 million LBO, according to Pitchbook.

The so-called “integration platform as a service” market is attracting substantial interest from well-known investors like TPG Capital and Francisco Partners as digital adoption drives a greater need for integration technology specialists, senior investors at the firms told PE Hub.

The firms’ bet on this software vertical came earlier in May as the pair jointly acquired Boomi, a cloud-based iPaaS, from Dell Technologies. Boomi, which is currently in growth mode, is yet to produce much profit. Nevertheless, the investors valued the carve-out at $4 billion.

According to TPG’s Nehal Raj, Boomi reflects a new trend of “growth buyouts,” where traditional late-stage investors are prioritizing businesses with strong growth profiles – some of which are growing as much as 30 percent to 50 percent annually – over high margins in the near term. This is because cashflow generated is being reinvested in the company to drive that growth. While this type of deal didn’t exist a decade ago, over the past two to four years it became more prevalent in the software market, the investor explained.

“This is a great example of one of the largest growth buyouts ever done,” TPG’s Raj said.

Check out Milana’s full report on PE Hub.

Impact: In other healthcare news… Bain Capital Double Impact, a social impact investor, has invested in ConvenientMD, positioning the New England provider to expand access to its differentiated, affordable and flexible urgent care facilities.

The deal follows a period in which, as one healthcare banker recently put it, “more and more people have tried urgent care and have had a good experience.”

ConvenientMD, for its part, joins a host of Bain investments that it says are focused on serving underserved populations: Arosa, Aveanna, Beacon Health Options, Broadstep, HealthDrive, Multi-Specialty Healthcare, HCA, Rodeo Dental, and Surgery Partners.

The new investment in ConvenientMD provides an exit for current owner Starr Investment Holdings, which backed the platform in November 2018. Read PE Hub’s brief on the deal.

That’s it! Have a great week ahead, and as always, write to me at springle@buyoutsinsider.com with your tips, comments or just to say hello!

 

Also of note (may require subscriptions)

New pool: Mountaingate Capital launched a second lower mid-market buyout offering, five years after transitioning from predecessor firm KRG Capital Partners. Fund II is seeking roughly the same amount raised by Mountaingate’s inaugural fund. Fund I closed in 2017 at its $395 million hard-cap. Read it here.

Transparency: Perhaps the most important lesson secondaries professionals have learned over the past few years is the importance of transparency, Buyouts writes. The need for transparency, while always a vital aspect of executing a successful GP-led deal, is taking on even greater significance in deals where external M&A buyers express interest in picking off assets included in secondaries transactions. A recent situation involving New Mountain Capital is one example. Read more on Buyouts.

No dairy pleaseOatly Group expects to raise as much as $1.65 billion for itself and its investors in an initial public offering, potentially giving the maker of plant-based food and drink products a total valuation of over $10 billion, writes Bloomberg. The maker of oak milk among other products is backed by investors including Blackstone GroupOprah Winfrey and Jay-Z, plus Starbucks founder Howard Schultz.

 

They said it

“We are seeing some of the highest-quality dealflow that we have ever encountered in the secondaries industry, because blue-chip GPs are laser-targeting their most preferred assets to hold on to for longer.” 

Matt Jones, partner and co-head of Pantheon’s secondaries team, who is set to join TPG as a co-managing partner of its global secondaries business, speaking to Private Equity International