Enhanced Equity’s NextCare returns to the market

  • Healthcare PE firm invested in NextCare in ’10 via Fund I
  • Arizona company operates ~140 walk-in urgent care clinics
  • Recent segment activity: Brockway Moran’s MD now sale

Enhanced Equity is in the midst of its latest sales process for urgent-care provider NextCare, according to three sources.

The sellers have turned to JP Morgan for financial advice, the sources said. First-round bids have been submitted and management presentations are underway, they said.

Mesa, Arizona, NextCare produces north of $40 million in Ebitda, the sources added.

The auction comes after Madison Capital in February completed a $240 million first and second lien credit facility to finance the recapitalization of NextCare by Enhanced Equity.

Healthcare-focused Enhanced Equity invested in NextCare in 2010 through its first fund, which collected $224 million in 2005.

The New York lower-middle-market firm has called off more than one sale attempt in the years since.

The Wall Street Journal reported in January 2015 that NextCare was in the market. After that process was pulled, the company came close to clinching a deal with a European sponsor in March 2016, Buyouts reported at the time.

Founded in 1993, NextCare provides urgent care and occupational medical services throughout its about 140 walk-in clinics spanning 10 states.

Enhanced Equity Managing Partners and Co-Founders Andrew Paul and Malcolm Kostuchenko hold board positions at MD Now.

As the sales process for NextCare heads toward its second round, the auction for an urgent care network dominating much of the South Florida market came to a head just a few days ago.

Brockway Moran & Partners sold MD Now to consumer-focused Brentwood Associates, concluding a Houlihan Lokey-run auction that Buyouts unveiled in May. Brockway is making a more than 4x return through the MD Now sale, a source said.

In other urgent care activity this year, Warburg Pincus’s CityMD bought Stat Health from Spanos Barber Jesse & Co in a deal valued just south of $100 million, Buyouts reported. The platform at the time concurrently added FirstMed Immediate Medical Care, a single urgent-care clinic in the NYC borough of Queens.

New York’s Warburg bought CityMD less than a year earlier in one of the segment’s most high-profile transactions in recent years. The deal was reportedly valued at about $600 million.

J.P. Morgan also served as sell-side adviser on the CityMD transaction.

Other PE-backed assets include Abry PartnersFastMed and Revelstoke Capital PartnersFastPace Urgent Care, among various regional platforms the likes of Urgent Team, whose backers include SV Life Sciences, River Cities Capital Funds, Crestline Investors and Petra Capital Partners.

Strategic players include MedExpress, which UnitedHealth’s Optum unit bought in 2015.

A JP Morgan spokesperson declined to comment, while those with Enhanced Equity and NextCare couldn’t be reached for comment.

Action Item: Take a look at the rest of Enhanced’s portfolio: https://www.enhancedhealthcare.com/portfolio-2/