PE portfolio companies shift operations in covid fight, Kelso to buy Lindsay Goldberg’s Refresh Mental Health, AdaptHealth strikes $2bn deal for AeroCare, Varsity Healthcare unites two revenue cycle management business

AeroCare, backed by Peloton Equity, SkyKnight Capital and SV Health Investors, has agreed to be acquired by AdaptHealth for $2 billion.

Good morning!

As the nation prepares for a new occupant in the White House and deals with an unsettling rise in coronavirus cases, private equity-backed companies that successfully pivoted operations in response to the pandemic are well-positioned for future turbulence, be it another lockdown, political and social unrest, or natural catastrophes.

Consider Suuchi, an Edison Partners-backed fashion-tech business that switched from its core business – catering to clients in the lingerie and baby clothing sector – to quickly build a new revenue stream by re-purposing part of its global supply chain capacity to mass produce and source personal protective equipment (PPE).

On a more lurid note, Blackford Capital’s Mopec, a morgue equipment provider, doubled down on its core business. In the wake of a nationwide rise in deaths, Mopec launched a low-cost, mass-produced morgue storage rack, marketed a CDC-compliant body bag and expanded its client base to include state governments.

“Not all were able to act this swiftly,” says Matt Zimmer, managing director and head of William Blair’s Services & Industrials Investment Banking groups, speaking from Chicago. “But this market was so unique that the ones that acted quickly are in better shape.”

Check out Karishma Vanjani’s deep dive on the lessons learned from PE-backed businesses through the pandemic.

Shaking hands: AeroCare, backed by Peloton Equity, SkyKnight Capital and SV Health Investors, has agreed to be acquired by AdaptHealth at a $2 billion purchase price. The deal comes after AdaptHealth this summer spent $487 million on two acquisitions while scoring a PIPE investment from private equity investors including One Equity Partners and Deerfield Management.

AeroCare, which provides home respiratory therapy products and services, originally tapped advisers for a sale back in 2018, PE Hub wrote at that time.
Elsewhere, Kelso & Co. has clinched a deal to acquire Lindsay Goldberg’s Refresh Mental Health, three sources told PE Hub. Check out my full report.

Disruption to the healthcare industry in the wake of the pandemic has shined a light on the demand for behavioral health, which is viewed as a particularly applicable area of telehealth in the remote environment. Unemployment and loss of life stemming from the crisis is expected to create long-term distress, boosting demand for providers of mental health services. In relevant activity, TPG made a $1.2 billion bet this summer for another industry player, LifeStance Health.

In other news … Varsity Healthcare Partners’ DuvaSawko has joined forces with Abeo, creating a combined revenue cycle management services provider serving both emergency medicine and anesthesia practices. Read my story for more context behind the deal.

That’s it for me today. As always, write to me at springle@buyoutsinsider.com with any tips, feedback or just to say hello.

Note to Readers: It’s that time of year … for the 21st time, the editors of PE Hub and Buyouts honor exceptional buyouts with our Deal of the Year Awards.
Winners are chosen in seven categories: Deal of the Year, Large-Market Deal of the Year, Middle-Market Deal of the Year, Small-Market Deal of the Year, Turnaround of the Year, International Deal of the Year, and Secondaries Deal of the Year.

Go here for more information and to read about rules and methodology. Also check out past winners. Last year, New Mountain took the crown with its exit of Equian.

If you have additional questions, email Private Equity Editor Chris Witkowsky at cwitkowsky@buyoutsinsider.com.