Bain’s $1.25b deal for Great Hill’s B2B healthcare marketplace PartsSource, Z Capital makes 2.7x on Premier Thermal, Summer reading with PEI Media

Behind Bain's $1.25 billion deal for PartSource

Morning, hubsters!

Books: Before we get to today’s news, we’ve got PEI Media’s list of summer reads for you. The list includes just-published options and perennial favorites with a mix of ideas for the beachgoer thinking about their next deal as well as readers looking to dial things back for a bit. Thanks to those who participated! Check it out on PE Hub.

Healthcare meets tech meets supply chain: Bain Capital Private Equity sees a vast opportunity to leverage the continued digitization of healthcare processes, with plans to build upon the success of newly acquired PartSource — a company that, from a B2B perspective, can be likened to an “Amazon of healthcare”.

The transaction, announced Tuesday, assigns Aurora, Ohio-based PartSource a total enterprise value of $1.25 billion, sources familiar with the deal told PE Hub. Great Hill Partners is exiting in the deal, marking the latest in a string of recent scale exits at the nexus of healthcare and tech. That includes the majority sales of Quantum Health and RxBenefits, which both commanded $1 billion-plus valuations, PE Hub previously wrote.

This time around, it was through Bain’s learnings from existing and prior investments in healthcare providers like Aveanna Healthcare, US Renal Care and HCA that it was exposed to the value of a company like PartSource. “Having historically and currently been investors in provider businesses, we see some of the challenges our businesses have,” Bain Managing Director Devin O’ Reilly told me. “In this case, that’s managing all the medtech equipment that’s in their facilities.”

Leading up to Great Hill’s investment four years back, Managing Partner Mark Taber said he saw in PartSource an opportunity to address a big bottleneck facing hospitals: “[We saw that] often the clinical engineers spend more time on the phone locating parts and ordering them then doing repairs… If your OR [operating room] goes down because [a part breaks] getting that fixed is critically important.”

Simply put, the online marketplace built by PartSource “makes it easy to point, search and click” for used and new parts and supplies, compare different options, see what’s and stock, and ultimately get equipment shipped back to the hospital quickly, Taber explained.

Speaking to Bain’s conviction in the business, the firm accelerated an anticipated sale process from ever getting underway. “Bain came fast, strong and hard to preempt the process before we fully launched,” Taber said.

For more on PartSource, check out my full report on PE Hub.

Makin’ $$: Z Capital Partners will produce an approximately 2.7x return on its investment with the sale of Premier Thermal Solutions to Dutch manufacturer Aalberts NV, according to a source familiar with the transaction.

ZCP in 2017 formed PTS, a commercial metal heat treating company, through the simultaneous acquisitions of Atmosphere Annealing and NitroSteel from Brazilian steel group Gerdau. Based in Lansing, Michigan, the company generates annual revenue of roughly $60 million, according to the buyer’s press release.

ZCP, with offices in the US and Switzerland, invests in the consumer, media, publishing, metals and business services sectors.

For details on how PTS grew both organically and inorganically under ZCP, read Karishma’s report on PE Hub.

That’s it for me! Have a great week ahead, and as always, hit me up with feedback, tips n’ gossip, or whatever at springle@buyoutsinsider.com