Healthcare deals of the week involve Warburg Pincus, Carlyle, Apax, GHO and Vistria

PE deals in healthcare are moving at a brisk clip.

Happy Fri-yay, Hubsters! Aaron here on the Wire to finish off the week.

Before we move onto deals, it’s Veterans Day, and I’d like to thank veterans for their service.

Healthcare heartbeat. As you probably know, one of the beats I cover is healthcare. This week, there were a few healthcare deals that caught my eye.

Urgent care exit. This week started off with a bang with Monday’s announcement that VillageMD is acquiring Summit Health-CityMD, a provider of primary, specialty and urgent care. The deal is valued at about $8.9 billion with investments from Walgreens Boots Alliance, and an affiliate of Evernorth, a subsidiary of Cigna.

When the deal closes, Warburg Pincus will exit Summit Health-CityMD. Summit Health has been backed by Warburg since 2017.

There is a lot to unpack about this deal and next week I’ve got an interview scheduled with Thomas “TJ” Carella, managing director and head of the healthcare group at Warburg. I’m looking forward to breaking this deal down and hearing what he has to say.

Here are some more recent healthcare deals of note:

Elevance Health (formerly known as Anthem) acquired BioPlus, a specialty pharmacy from CarepathRx, a portfolio company of Nautic Partners, a middle-market private equity firm that focuses on three industries: healthcare, industrials and services.

Elevance Health is a health insurance provider based in Indianapolis. No financial terms were disclosed, and the transaction is expected to close in the first half of 2023, upon which the specialty pharmacy will operate as part of IngenioRx, Elevance Health’s pharmacy benefit manager within Carelon, its healthcare services brand.

“As a trusted, lifetime health partner, the acquisition of BioPlus helps us deliver on our whole-health strategy that gives our consumers improved access and reliability to their prescriptions when they need it most,” said Pete Haytaian, executive vice president, Elevance Health and president of Carelon. “In making BioPlus part of the Elevance Health family, we are committed to leveraging our resources to scale and broaden the reach of BioPlus’ best-in-class specialty pharmacy capabilities, delivering greater affordability and access to critical medications.”

Another deal was in the contract development and manufacturing organization (CDMO) space.

GHO Capital Partners and The Vistria Group agreed to acquire a controlling stake in Alcami, a North Carolina-based pharmaceutical CDMO. The sellers are Madison Dearborn Partners and Ampersand Capital Partners, who reinvested significant equity as part of the acquisition.

GHO Capital and Vistria will acquire a 50/50 controlling interest, and Ampersand and Alcami management will reinvest “significant equity,” according to the press release.

“We believe Alcami represents a unique opportunity to acquire a rapidly growing CDMO with complementary capabilities in attractive markets,” said Mike Mortimer and Alan MacKay, managing partners, GHO Capital. “We have built a strong relationship with the Alcami management team and have been impressed by the significant transformation program and high growth. The company is set to accelerate its growth and leveraging our specialist expertise, we are delighted to be supporting them to diversify its product and service mix, pushing into new markets such as Europe.”

Coming up next week, I have an interview scheduled with Jon Maschmeyer, senior partner and co-head of healthcare for Vistria, so stayed tuned for a deep dive into that deal.
Another healthcare deal announced last week involved a Carlyle-backed healthcare tech provider merging with an Apax Partners portfolio company.

Backed by Carlyle, CNSI is a McLean, Virginia-based provider of healthcare tech products. Backed by Apax Partners, Kepro is a Nashville-based provider of tech-enabled care management, quality oversight, and clinical assessment services.

“The combination brings CNSI’s leading health technology capabilities together with Kepro’s clinical expertise and unique service offerings, allowing the company to better serve its clients and improve care quality and health outcomes,” said Dayne Baird, CNSI board member and managing director at Carlyle.

I’m hoping to speak with folks from Apax and Carlyle, so please be on the lookout for a follow-up story about this deal too.

E-clinical value chain. Earlier this week I wrote about how GTCR applied its Leaders Strategy approach with one of the Chicago-based firms’ latest healthcare platforms – Harpula.

Harpula Health Holdings is based in Raleigh, North Carolina and will seek to acquire companies and assets in the technology-enabled pharmaceutical solutions industry as part of a strategy to “build a market-leading company focused on improving the efficiency of drug research and development,” according to the firm.

This move is all about the firm trying to capitalize on some of the trends in technology and tech-enabled services going into pharma services, especially in the “the clinical trial ecosystem,” said Ben Daverman, managing director and co-head of healthcare at GTCR. “There’s increasing complexity and outsourcing of clinical trials and therefore the capabilities that are needed for clinical trials. With Harpula, we will invest behind our management team to identify assets that we can acquire to build a leading company that provides these critical tech enabled services into pharma and clinical trials.”

You can read the whole story here.

Speaking of GTCR, the firm also recently made a strategic investment Biocoat, a specialty manufacturer of hydrophilic biomaterial coatings, services and dip-coating equipment for medical devices.

The recapitalization of Biocoat will enable the company to continue its growth in the biomaterial coatings market and will open opportunities for global growth, enhanced product offerings and manufacturing facility expansion.

I’m scheduled to speak with Luke Marker, managing director at GTCR later today about this investment, with a story to follow next week.

If you’re doing deals in the healthcare sector, I’d love to talk with you. To start the ball rolling, email me at aaron.w@peimedia.com.

Off-duty. Have you ever wondered what some investors do when they are off the clock? Well today is your lucky day. Buyouts’ Kirk Falconer writes off-duty pieces, where he gets personal with various investors in the PE world and provides a snapshot of top investors, including a few details about what they do when not chasing deals.

The latest edition features Anthony Maniscalco, managing partner and head of Investcorp’s Strategic Capital Group. Here are some excerpts.

If you weren’t in PE, what job would you like to have?

General manager of the Chicago White Sox. I grew up with and am still a big fan of the Sox. I love the strategy and tactics of building and managing a baseball team, combined with the pressure and challenge of winning.

Professionally, what was your toughest moment?
I spent two years at Credit Suisse (2016-2017) looking to build a GP staking business. I left there from Blackstone, where I had successfully been part of a team that raised $3.3 billion for a first-time GP staking fund. While there and fundraising, I traveled over 400,000 miles together with my partner John Powers before we parted ways in early 2018.
I built scar tissue from that experience, and it was the first time in my career where I had to take a step back, not forward. It made me stronger and increased my conviction to succeed.

You can read the whole story here.

That is a wrap for me. Here’s hoping overall deal activity picks up. Wishing everyone a wonderful weekend! Mk Flynn will be writing to you on Monday.

Cheers,

Aaron