Bain Double Impact Fund doubles down on healthcare, adding HealthDrive

  • $390 mln social impact fund raised in July ’17
  • Second healthcare investment after Arosa+LivHOME
  • Transaction follows Cain Brothers auction

Echoing major themes supported by its large-cap fund, Bain Capital Double Impact is proving a devoted investor in healthcare providers serving some of the nation’s most vulnerable populations.

Bain’s impact-investing arm said Jan. 3 that it acquired specialty physician services company HealthDrive from Riverside Partners. This follows the firm’s October formation of Arosa+LivHOME, a non-medical homecare company created through a pair of acquisitions.

“One of the investment theses we have here is providing high-quality, low-cost care in a setting that’s convenient,” Peter Spring, managing director of Bain Capital Double Impact, told Buyouts.

The HealthDrive transaction concluded a Cain Brothers-run process that HealthDrive President Dan Baker described as extensive and involving outreach to numerous parties.

HealthDrive, whose 190 providers reach more than 2,000 facilities, provides services including dentistry, optometry, audiology and — the largest line — podiatry. The Wellesley, Massachusetts, company serves elderly patients living in long-term, skilled nursing and assisted living facilities.

Bain Double Impact fund, which collected $390 million in July 2017, targets lower-mid-market companies that will deliver market-rate financial returns along with a measurable social impact — be it environmental sustainability, health and wellness or community building.

HealthDrive meets this dual goal by bringing a host of on-site treatment services to one of the nation’s most vulnerable populations in a preferred setting.

Significant questions persist around the financial health of nursing homes, the setting in which many HealthDrive physician services are offered. But Spring said the company is not exposed to those industry headwinds.

“We are providing these essential services, but we are, in almost all cases [more than 98 percent of the time], billing third-party payers,” Spring said, referring to Medicare, Medicaid and commercial reimbursement.

The growth and demand for on-site care delivered to elderly people in nursing facilities is multifaceted, Baker said.

Given the clinical complexity of this population, there’s a need for the four specialty services HealthDrive provides, not just on an acute basis but also on a preventive-care basis, he said.

The themes supporting the impact-investment arm’s healthcare strategy overlap with many of those at Bain’s large-cap fund.

For example, Bain and J.H. Whitney jointly own Aveanna Healthcare, one of North America’s largest pediatric-focused home-care providers.

Bain is also an investor in behavioral-health-management company Beacon Health Options and Surgery Partners, an operator of outpatient surgical facilities.

The impact-investment arm will continue to actively pursue opportunities in other healthcare segments, including pediatric dentistry and behavioral health, and more specifically, addiction treatment, Spring said.

Action Item: Contact HealthDrive at +1 888-964-6681.