What’s going on, everybody?
Retail healthcare segments ripe for consolidation have commanded plenty of private equity dollars over the last several years. But one pending vision care deal suggests the market is evolving as large but still privately-owned players look to move the needle.
Partners Group’s EyeCare Partners recently agreed to buy CEI Vision Partners from Revelstoke Capital Partners in a deal valued at about $600 million, according to sources familiar with the matter.
While seemingly straightforward on the surface, the acquisition appears to be the first example of a large PE-owned eyecare platform buying another sizable sponsor-owned platform, at a platform multiple.
More large assets in vision care and other retail healthcare segments (like dermatology, for instance) are likely to pursue similar strategies, sources predict, particularly for those companies and PE owners whose end-game is to take those assets public. Supporting this logic for value creation: the arbitrage between the multiple paid for a scale add-on acquisition (which one can buy down by reducing overhead, for example) and the multiple at which such companies could ultimately go public is very significant.
One (hotly pursued) subsector that has already witnessed this type of dealmaking is vet care. JAB Investors’ National Veterinary Associates recently struck two $1 billion-plus deals for Ethos Veterinary Health and SAGE Veterinary Care, whereas Europe’s IVC Evidencia, backed by EQT and Silver Lake, snapped up VetStrategy. Both platforms are speculated IPO candidates.
‘Deal’: Speaking of Partners Group, the four letter word “deal” was banned at a global town hall meeting in early June by David Layton, the Swiss firm’s chief executive, writes the Wall Street Journal.
Layton, according to WSJ, said at the meeting that the firm would make a $10,000 donation to its charitable arm and deduct $100 from that donation any time the word was written or uttered by a junior employee. Partners using the D-word would be fined, in the form of a $1,000 donation to the charity for each violation, WSJ said.
The executive’s rationale? He is trying to get his colleagues to shift from a transactional mind-set to one he calls “industrial”, WSJ writes. Read it here.
Carve-out: In other Friday morning news, New York’s Blue Wolf Capital Partners is acquiring CIVCO Radiotherapy from Roper Technologies.
Civco, based in Iowa, is a manufacturer of radiotherapy patient positioning and immobilization equipment. The company serves a blue-chip customer base of academic and community hospitals, cancer centers and OEM manufacturers.
The all-cash deal is valued at $120 million, said Roper, who was advised by William Blair on the deal. Roper will retain CIVCO Medical Solutions business. Read PE Hub’s brief on the deal.
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