Happy Fri-yay, Hubsters! Aaron Weitzman here, hoping that deal activity heats up, as the weather gets cold, and we move closer to winter.
Speaking of deal activity, today we’re looking at another example of GTCR’s The Leaders Strategy – this time in medical devices – and we’re seeing increased private equity interest in airports, highlighting deals from Corsair in the US and CPPIB in Europe.
Healthcare heartbeat. GTCR has been extremely active recently, as I have covered three of their deals over the past month. Among those, the latest investment took place in the medical device space.
The Chicago-based firm looks to replicate Resonetics’ success with new investment Biocoat, as I had a chance to speak with Luke Marker, managing director about the investment in the maker of coatings for medical devices.
GTCR is turning to a familiar playbook with Biocoat, a specialty manufacturer of hydrophilic biomaterial coatings, services and dip-coating equipment for medical devices. The firm announced its majority investment in the Horsham, Pennsylvania-based company earlier in November. With Biocoat, GTCR is once again tapping Chip Hance, a seasoned executive in the medical device business.
Back in 2017, GTCR and Hance formed Regatta Medical to pursue opportunities in medical devices. In 2018, Regatta acquired Resonetics, a leading medical device contract manufacturer. Resonetics subsequently completed 10 add-on acquisitions, and, in 2021, Regatta sold a minority equity stake in Resonetics, to the Carlyle Group in a transaction that valued the company at $2.25 billion.
Now, GTCR and Hance aim to take a similar path with Biocoat.
“With Resonetics, we’ve expanded around the core Resonetics, laser micro-manufacturing capabilities and we’ve done ten add-ons since acquiring that business in 2018. We significantly scaled the operations. There’s an expansion geographically, but then there’s also the addition of novel capabilities. Resonetics is a very large franchise in the interventional medtech contract manufacturing space. We recapitalized it around this time last year with Carlyle, as they took a minority stake at a $2.25 billion valuation of the company. That validated the strategy we had here with Regatta Medical, and what we think we can do with Biocoat.”
You can read the whole story here.
Spotlight on services. It looks like dealmaking in healthcare services remains … healthy. It’s the largest vertical inside of PE healthcare investing, making up 10 percent of buyout and growth deals in 2022, according to Pitchbook.
Amid all the turmoil on the macroeconomic front, deal and exit activity in healthcare services have been resilient, especially in the lower mid-market.
So far there have been 511 deals in healthcare services, and it’s estimated to end up at 725 by the end of the year. While that number lags behind last year’s total of 1,004, it is above pre-pandemic 2019’s total of 593. Last year’s 721 was a rarity.
Not surprisingly, exit activity in the subsector this year is much closer to normal, as this year we are sitting at 34 so far. Last year’s total, with 109 exits, was an anomaly.
Airport advancement. Corsair and Vantage Airport Group clinched a $4.2 billion deal for JFK’s Terminal 6. I thought this was timely, given the holiday season is approaching and people will be traveling. It also seems as though we are far enough removed from the height of covid and the pandemic, where airports are becoming more busy.
Obey Martin Manayiti reported on the deal and caught up with Hari Rajan, partner and head of infrastructure at Corsair.
“We were bullish about traffic volumes in general and globally as an investor,” Rajan said. “That’s a theme that we are keen to put capital behind, assuming that it can be done in the right type of deals that have the right elements to them.”
Even as the world faces an economic slowdown that will likely have impacts across different sectors, Rajan expressed confidence that Corsair will navigate the situation. “With private equity sponsorship, there is a certain amount of innovation and creativity and nimbleness in deal structuring that can get you through a volatile period like this.”
Vantage has worked with more than 30 airports around the world, transitioning 20 of them from public to private management, including recent work at LaGuardia Airport in New York.
You can read the whole story here.
And JFK is not the only airport that will look to the private equity industry for upgrades and improvements.
Craig McGlashan over at PE Hub Europe reported that CPP Investments has agreed to buy a 1.59 percent stake in Aéroports de Paris (Groupe ADP) from Royal Schiphol Group.
Paris-based Groupe ADP owns international airports Charles de Gaulle Airport, Orly Airport and Le Bourget Airport – all based in Paris – as well as interests in a network of 25 airports worldwide that handled 160 million passengers last year. It has committed to carbon neutrality at 23 airports, including its Parisian ones, by 2030.
Once the deal is settled, CPP will hold a stake of around 5.64 percent in Groupe ADP, or €791 million-worth at market prices on 16 November.
The seller, Royal Schiphol Group, is a Dutch airport company. It owns and operates Amsterdam Airport Schiphol, Rotterdam The Hague Airport and Lelystad Airport, and holds a majority stake in Eindhoven Airport. It is headquartered in Haarlemmermeer.
For more on the deal, check out PE Hub Europe’s coverage here.
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Bon weekend. Before I sign off, I want to give a shoutout to both The Riverside Company and McDermott Will & Emery. The former hosted a breakfast media roundtable yesterday, and the latter connected me with a bunch of healthcare M&A lawyers that I got to meet in person over lunch last week. I love that in person meetings and get-togethers are back on the table. If you want to meet, feel free to reach out to me at aaron.w@peimedia.com so we can set something up!
That is a wrap for me. MK Flynn will be back with the Wire on Monday.
I won’t be writing to you next week, due to the Thanksgiving break so I wanted to wish everyone an albeit early, happy and safe turkey day. I know I am excited to recharge my batteries and come back to close out the year strong.
Cheers,
Aaron
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