PE HUB Healthcare Wire Highlights, 10.3.19

Great Hill and the evolution of employer benefit services M&A

It’s Thursday.

Grab your hot coffee, healthcare enthusiasts. Fall has officially arrived.

In this week’s news, I learned that Compassus, the hospice care giant, locked down a buyer in a consortium comprised of TowerBrook Capital and Catholic non-profit health system Ascension. Elsewhere, buyout funds are digging through deal books just out for Webster’s BayMark, the network of opioid treatment clinics.

Double dipping

Across the board, it seems that more firms are reuniting with companies they previously owned.

Ian Fowler, who co-head’s Barings’ Global Private Finance Group, recently told me that PE groups are increasingly targeting properties they’ve owned in the past as they grow in fund size, typically outside of a process: “If you take this angle or perspective that there’s more uncertainty about where we are in the economy — and if you’re trying to reduce your risk — finding something you know well makes sense. … Especially if you think there’s more meat on the bone.”

In other words, if you accept that you’re still in a world where the best assets are still commanding historically high deal multiples and valuations, why not take things a step further than “sticking to your knitting,” as PE sources like to say. If the opportunity presents itself, ought you simply buy back a company you’ve already had success with once before, you still believe in, and whose management team you already know well?

Such was the case with one recent deal I’m told caught the healthcare market by surprise. Or, perhaps more accurately, one opportunity that some PE firms, family offices and strategic buyers feel they missed out on.

GTCR last week announced that it is reinvesting in Cole-Parmer, only two-and-a-half years after it sold the company to Golden Gate Capital. The latter is rolling over a significant minority stake alongside management.