Good morning, dealmakers.
MK Flynn here on a sunny Monday in New York. I spent yesterday afternoon at the Brooklyn Botanic Garden, and it was lovely to see Spring in full bloom!
This morning, we’re looking at deals flourishing in two very different sectors: MedTech and music rights.
We’ve got Deep Dive into a MedTech deal, featuring an interview with Nordic Capital, and a roundup of 10 recent deals in the sector in the US and Europe.
In music rights, we’ve got a Deep Dive on Lyric Capital, which has snatched up the rights to a wide range of musical artists from Frank Sinatra to Taylor Swift.
Saving lives, saving money
“Medtech is an interesting area to invest in,” Nordic Capital partner Jonas Agnblad told PE Hub Europe’s Nina Lindholm in an interview.
“There’s room for outsized growth driven by the high general pace of innovation.”
This innovation has an ability to significantly improve the quality of lives for patients, according to Agnblad, and “ultimately also generates savings for the payers.”
Among the recent deals in MedTech is Nordic Capital’s announcement earlier this month that it will acquire a majority share in corpuls, a company that provides emergency medical services and cardiac resuscitation. Corpuls is headquartered in Kaufering, Germany. The company reported revenues of €127 million in 2022 and employs 450 people.
The healthcare industry’s adoption of technology, accelerated by the pandemic, has attracted significant interest from private equity investors in the last few years, writes PE Hub Europe’s Irien Joseph. The MedTech sector is likely to gain even more traction, given the rise in consumer awareness and advancements in technology.
With private equity firms mixing it up with pharma software, tele-diagnostic companies, medical device makers and others, we have witnessed some healthy dealflow in the MedTech sector across the US and Europe.
Irien identified 10 MedTech deals announced so far this year on both sides of the Atlantic.
Here are details on a few:
In April, EQT-backed Evidia acquired 4ways, a UK and European tele-diagnostic company, from ECI Partners.
ECI Partners first invested in 4ways in 2018. This acquisition represented a full realization for ECI, generating a 2.7x return.
Thoma Bravo last month announced that it will invest in LOGEX, a European healthcare analytics provider. LOGEX is headquartered in Amsterdam and has over 450 employees.
Also in March, HIG Capital acquired Polygon, a provider of integrated healthcare maintenance services to hospitals in Italy and Spain. Polygon is headquartered in Rome and has more than 600 employees.
KKR’s global sciences platform Gamma Biosciences has agreed to sell its operating company Astrea Bioseparations to Biotage in exchange for newly issued shares in Biotage, the company announced in February.
For more deals, see Irien’s deal roundup on PE Hub.
Start spreading the news
Investing in music royalties and copyrights has become a popular trend in private equity over the past few years, and Iris Dorbian has been tracking the investments closely. A key reason for the sector’s appeal is its recession-resistant ability to provide stable cashflow amid a market downturn.
For Lyric Capital co-founders Jon Singer and Ross Cameron, that was the case when the two former music executives and investors formed the New York buyout shop in 2019.
Through its publishing arm Spirit Music Group, Lyric has amassed an impressive catalog of over 100,000 owned and managed copyrights and master recordings. Among its holdings are hits recorded by iconic artists such as Elvis Presley, Frank Sinatra, The Who, Madonna, Taylor Swift, Whitney Houston, Jay-Z and Eminem.
Currently, Lyric has “north of $1 billion” in assets under management, Cameron told Iris.
Prior to launching Lyric, Singer and Cameron had been avid investors in this space for several years. It was their success that empowered the pair to conceive of Lyric.
“At the end of the day, we realized that we had built up a unique sourcing strategy and investment team that could provide like-minded capital with a very interesting return proposition,” Cameron explained. “We were confident, due to the fragmented ownership of music assets, that we would be able to execute on a roll-up strategy and acquire a great portfolio of copyrights. The logical next step for us was to create a market-leading firm to capitalize on the opportunity.”
We expect to see a lot more deals from Lyric.
“We’re working on closing multiple transactions which range from $10 million to $250 million,” Cameron revealed. “Hopefully we’ll be coming to you with some exciting news in the coming months and look forward to speaking about the transactions that we can discuss, once they are closed.”
PE Hub will be listening.
On that note, I’ll sign off.