- Deal provides exit for Sterling Partners, which backed Q-Centrix in January 2014
- Data registry provider serves >500 health systems
- Chicago company’s revenue has grown at >25% annual rate in recent years
TPG Growth has purchased Q-Centrix, a data solutions provider that helps hospitals manage information for quality improvement.
The deal concludes a Houlihan Lokey-run sales process and marks an exit for Sterling Partners, which first invested in Q-Centrix in January 2014.
Varagon Capital Partners provided a $70 million senior secured credit facility to support the acquisition.
Matthew Hobart, who as a partner at TPG Growth leads the platform’s healthcare efforts, said his team for years has explored opportunities fitting within the theme of data management for provider businesses, and particularly those that align with value-based care.
“The reason we’re excited? It’s not a super big company, but it’s playing in a very big part of where healthcare wants to go,” Hobart said, pointing to trends around patient safety, quality of care and hospital accreditation.
Q-Centrix, through its technology platform, Q-Apps, helps healthcare providers collect, validate and submit accurate patient information to third parties.
Simply put, the data registry company helps hospitals manage how they are performing from quality, cost and safety perspectives, serving as a benchmark both internally and against other hospitals, Hobart explained.
Q-Centrix, with locations in Portsmouth, New Hampshire, and Chicago, is led by CEO Milton Silva-Craig. Its client base includes more than 500 hospitals and healthcare providers, including eight of the 10 largest U.S. health systems.
Hobart declined comment on terms of the deal but said Q-Centrix has produced annual organic revenue growth of 25 percent-plus for a number of years.
The roughly $1.4 billion market is growing at a 15 percent annual rate, and within that market, hospitals increasingly are choosing to outsource data management to players the likes of Q-Centrix, Hobart said
Recent healthcare investments for TPG Growth, the middle-market and growth-equity platform of TPG, include its 2017 purchase of Medical Solutions. The deal valued the medical staffing provider at about $500 million, sources familiar with the matter said at the time.
TPG Growth’s umbrella of investments also includes Evolent Health, GoHealth Urgent Care, Northstar Anesthesia and Precision for Medicine.
Hobart said TPG Growth will continue to evaluate opportunities across behavioral health, consumer-facing physician practice businesses, primary care and pharma services.
Action Item: Matthew Hobart’s profile on LinkedIn: linkedin.com/in/matthew-hobart-a143bb39.
Update: This story was updated to clarify the nature of the business. Add debt financing figure.