TPG, WCAS-owned Kindred Healthcare fields PE interest, PE M&A mark best quarter since 2007, Lincolnshire, VSS back hospital-fire-safety asset

Morning!

Humana has accelerated its plans to acquire the remaining 60 percent of Kindred at Home not already owned – buying stakes from TPG and Welsh, Carson, Anderson & Stowe. The deal values Kindred at Home at $8.1 billion, Humana said late Tuesday.

The announcement came on the heels of a PE Hub report noting that with the growth in demand for home health and hospice services, Humana wants and will acquire the remaining stake as soon as it becomes an option. With the original put-and-call arrangement, that pointed to a summer 2021 date.

Another moving part soon in play – Humana said it intends to divest a majority stake in Kindred’s hospice operations, exploring both a public listing or another potential transaction. Given its size, the prospective buyer pool is seemingly limited – with LHC Group and Amedisys the most natural of suitors, sources have said.

Meanwhile, sources told PE Hub that TPG and WCAS are separately evaluating a sale of Kindred Healthcare – which split from Kindred at Home in 2018 and is owned by the two PE firms only. Kindred Healthcare operates long-term, acute-care hospitals, inpatient rehabilitation facilities and contract rehabilitation services businesses. Read more on PE Hub.

Fire prevention: Lincolnshire Management and VSS Capital Partners are investing behind a niche market – fire and life safety in health systems – a service magnified in the wake of the pandemic, but perhaps underappreciated.
The firms collectively made a majority investment in Barrier Companies, whose various hospital safety services are in need as regulation demanding compliance grows more stringent.

“Normally, what we think about is evacuation. But, in actuality, with hospitals there are going to be patients you’re not able to easily transport out of a hospital right away; there’s lots of care going on real-time, not to mention a surgery or an operation that would need to happen,” Phil Kim, a managing director at Lincolnshire, told PE Hub in an interview.

Read my full report for more insights from Kim and VSS Partner Patrick Turner.

Best since 2007: Despite a more expansive rebound in private equity exits than expected, there’s no indication of a slowdown in activity or retreat in valuations, Pete Witte, EY global private equity lead analyst, told PE Hub in an interview.
Private equity deal activity in the past quarter totaled $261 billion, the highest value of transactions in any quarter since Q2 2007 and more than double Q1 2020, according to EY’s quarterly PE Pulse insights.

“I’d be surprised if valuations came down,” Witte said. “The pandemic really didn’t move the needle on valuations. Now you have SPACs that are in the mixture as well that are also competing for PE deal flow, so it all makes the atmosphere a little more volatile, and, for PE firms, it’s a little harder to find compelling assets and pay good prices for them.”

Read Milana’s full report on PE Hub.

That’s it! Have a great week ahead, and in the meantime, write to me at springle@buyoutsinsider.comwith any comments, deal tips or questions!