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Varsity’s Orthopedic Care Partners readies sale, Thoma buys in $6.6b deal, Novo’s Availity investment brings value to $1.7b-plus

Varsity's orthopedic biz preps sale while Thoma Bravo buys e-​commerce shipping software giant.

Happy Friday, readers!

Overwhelmed: One theme I’m hearing on repeat among private equity investors is: deal fatigue. There’s so much activity in the market, a lot of which are quality opportunities, meaning it’s that much more difficult to pick where to spend time. Resources are scarce, and investors only want to dig in and run hard at a company if they know they’ve got a good shot at winning. Especially with prices so high in sectors like healthcare and tech.
Do you agree or disagree? How is this changing how you approach deal sourcing, or rather, how is this impacting sale process dynamics? Write to me at

Speaking of new opportunities, a rare chance to invest behind a musculoskeletal care company that has achieved scale and professionalization is fast approaching.

Varsity Healthcare Partners, one of private equity’s first movers in the growing orthopedics specialty, is preparing a sale of Orthopedic Care Partners, sources familiar with the firm’s plans told PE Hub.

PE Hub sources said OCP is projecting EBITDA of around $45 million in 2021 – an increase on the $9 million EBITDA in 2017, the year Varsity invested in the business.
Favorable demographic and market trends – an aging population requiring more knee and hip replacements, and an active, young demographic prone to injuries resulting from exercise – are fueling growth in the market.

One problem for investors is that musculoskeletal care has proven difficult to transact in. Consolidation has occurred more slowly than in other more crowded pockets of healthcare, such as dermatology. That is partly because orthopedic doctors are well reimbursed, which means they have less incentive to transact with private equity.
OCP, subsequently, presents a scarcity value play. Check out my full report on PE Hub.

Big one: Just in, Thoma Bravo has a agreed to acquire in a take-private deal valuing the provider of e-commerce shipping software at approximately $6.6 billion. stockholders will receive $330 per share in cash, representing a 67 premium over its closing share price on Thursday.

Check out PE Hub’s brief on the deal.

Unique: Novo Holdings has acquired Francisco Partners’ minority stake in Availity in a transaction valuing the health information network between $1.7 billion and $1.8 billion, according to people familiar with the deal terms.

The transaction, both when Francisco invested four years ago, and now, with Novo joining the shareholder base, is not your everyday sponsor investment.

Availity, which supports collaboration among health plans and providers, is controlled and governed by some of the country’s largest health plans – including Anthem, Humana, Health Care Service Corporation and GuideWell – meaning decision making is of a different cadence, sources said. Francisco, with the deal, sold what was an approximately 18 percent stake to Novo, one person noted.

The investment follows Novo Holdings’ purchase of pharma services company AltaSciences in March – which marked the first purchase for the new team steering the Principal Investments arm’s push into US healthcare investing.

In this case, more parties were interested in investing in Availity through a structure that would allow more control, with the ability to leverage the company and drive growth at the platform through M&A. But PE Hub sources said that was never the playbook for Availity’s health plan owners – both at the time of Francisco Partners’ initial 2017 investment, and today.

For that reason, Availity quickly proved a better fit for less traditional PE funds that saw an opportunity to make what is essentially a riskless bet and generate a decent return, but not the return levels required by typical buyout funds.

Check out my full report on PE Hub.

That’s it for me! Have a great weekend, hubsters, and as always, write to me at with any tips or feedback, or just to say hello!

DEADLINE APPROACHING: Calling all next-gen firms and their investors! We need your participation in our fifth-annual survey of emerging managers and survey of emerging manager investors. As thanks, we’ll make sure you get a complimentary copy of the “Emerging Manager Report 2021,” based on these surveys (once it’s published this fall). All responses are kept confidential. The survey deadline is July 16.