PE HUB Healthcare Wire Highlights, 12.13.18

New on sponsors’ holiday lists: DME, Houston healthcare

Happy Thursday!

Is everyone racing against the clock to get work done before the holidays?

Oh man. I am! Besides the usual year-end shenanigans … I’ve been tasked with a new assignment this year. That is, to write my own portion of the family “Yuletide Greetings.” I can’t really complain. The new tradition is largely my own doing, after declaring that last year’s letter included a few too many “fake news” updates relating to my life in NYC. I’ve even got an end-of-week deadline.

Back to healthcare … where to start? First, I’ll highlight some assets that should be on your radar as we approach the new year.

Because we all know DME – durable medical equipment – is back in vogue, it should come as no surprise that yet another asset is headed to the auction block. AeroCare, backed by Peloton Equity and SV Health Investors, is joining peers including QMES in its search for a new owner. Read my story to learn more about the upcoming process.

Under the radar

In other activity, Kelsey-Seybold Clinic – a for-profit integrated healthcare organization in the greater Houston area – has hired an adviser to explore strategic alternatives in the coming months, I learned.

I don’t know about you, but Kelsey-Seybold sparks my interest. It’s not every day I hear about what one source described as a hybrid between multispecialty clinics and an HMO. The group is also very attractive as it runs its own Medicare Advantage plan, sources said.

Of course, my eyes also lit up because those with whom I discussed the company referenced DuPage. You all remember DuPage, right? The Chicago-area multispecialty physician group scored a $1.45 billion cash infusion from Ares Management last year, providing an exit for Summit Partners.

Sources said DuPage commanded a mid-teen multiple of Ebitda – which is notably higher than the 8x to 9x multiples at which primary-care groups have tended to trade.

I recall having a handful of conversations last year with folks curious about what other DuPage-like assets might be available for investment.


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