CD&R partners with Millennium Physician Group

Clayton, Dubilier & Rice has invested in Florida primary care group Millennium Physician Group, according to three sources with knowledge of the transaction. 

Financial terms could not be confirmed. However, some of the people said the investment is a partnership deal between CD&R and Millennium’s physicians, founders and management team. Existing owners are not selling out of the business.   

Millennium, headquartered in Fort Myers, Florida, is one of the state’s largest independent primary care practices with more than 300 healthcare providers and around 200 primary care providers. The company generates EBITDA of roughly $50 million, sources said. 

The transaction is the result of proprietary discussions between CD&R and Millennium, some of the people said, noting that Oppenheimer was first engaged for sell-side financial advice pre-covid. 

Both CD&R and Oppenheimer declined to comment, while Millennium executives did not immediately respond to PE Hub‘s request for comment. 

Founded in 2008, Millennium consists of primary care offices, imaging centers, lab services and wellness programs. The medical group offers various ancillary services, employing phlebotomists, physician assistants, registered nurses, physical therapists, diabetes educators, APRNs and X-ray technicians, according to its website. 

The company reimburses patients through both fee-for-service and value-based reimbursement models of care.

The deal comes at a time in which primary care assets remain highly sought after by the private equity community, with a particular emphasis around risk-taking or value-based care and payment models.

In recent activity, General Atlantic in late January invested in Equality Health, a Phoenix-based value-based primary care network serving the Medicaid, Medicare and ACA Exchange populations. 

In November, Sun Capital Partners bought Miami Beach Medical Group in the mid-$500 million range, implying an approximately 14x EBITDA multiple, while Arsenal Capital Partners bought Best Value Healthcare around the same time. 

Elsewhere, InTandem Capital Partners-backed Cano Health shocked the private equity community in early November when it unveiled a  $4.4 billion merger with Jaws Acquisition, a SPAC sponsored by real estate investor Barry Sternlicht.

For CD&R, the deal continues a busy month on the healthcare front.

On Friday, CD&R portfolio company Agilon Health filed to raise up to $100 million in an initial public offering. Agilon supports physicians’ shift away from fee-for-service reimbursement to a pay-for-performance model in the Medicare market.

Agilon’s roots date to October 2016, when New York’s CD&R formed the company with Ronald Williams, an operating advisor to the fund and a former Aetna executive.

In other activity, CD&R last week led an investment in M2GEN, a company using real world data to help find cures for cancer. Investing alongside The Merck Global Innovation Fund and McKesson Ventures, the total equity check was $100 million equity, people familiar with the matter told PE Hub.

The firm in May 2020 sold naviHealth to UnitedHealth’s Optum, receiving approximately $1.1 billion in cash proceeds, while generating a 2.5x multiple of invested capital, a source told PE Hub at that time.