VSS: Covid accelerated technology adoption in healthcare; new deals from KKR, TPG and Eir

Healthcare deals pick up at a brisk pace.

Good morning, dealmakers! Aaron here with the Wire.

Today, we’re honing in on healthcare.

To kick things off, VSS shares insights on the sector, including accelerated adoption of technology.

Then, we’ll look at a few deals in the sector that have caught our collective eye this week.
They include activity from KRR, TPG and Eir Partners.

Healthcare heartbeat. Continuing with PE Hub and PE Hub Europe’s outlook Q&A series, we have some fresh thoughts from Eric Kim, principal of VSS Capital Partners.

Here’s an excerpt from our Q&A with Kim:

How do you expect the first six months of PE dealmaking in 2023 to compare with the last six months of 2022?
In our pipeline, we saw more deals in 2022 than in 2021, and we expect that to continue into 2023. Our structured capital offering is particularly appealing in the type of dislocated market we are currently in and where there are potentially wide bid/ask spreads in the market. We provide flexible equity and debt capital from the same fund, and we work with founders to find the most suitable capital structure to meet both the company’s strategic growth plans and the founder’s needs.

What will be the most important trends affecting your healthcare dealmaking in 2023?
We are focused on value-based care and the continued expansion of healthcare technology. Aside from all of its obvious difficulties, covid has been a driver of both of these. On the value-based care side of things, it gave a glimpse into the benefits of a business model not primarily dependent on procedures and bed utilization. When it comes to healthcare technology, covid not only accelerated the adoption of immediately relevant technologies like telehealth, but it also broadened the mindsets of healthcare leaders to be open to technology and flexible capital solutions more generally, benefiting the overall healthcare technology market.

You can read the whole Q&A here.

Imaging investment. Speaking of leveraging tech, last year saw lots of diagnostic imaging deals, and yesterday there was a new deal in the space.

Novant Health Enterprise and TPG, announced an innovative new partnership to expand MedQuest Associates across the country. TPG’s investment in the partnership is being made through TPG Growth, the firm’s middle market and growth equity platform.

MedQuest owns diagnostic imaging facilities with a network of more than 50 centers under management.

“We believe the company is well-positioned to build its platform in existing markets and establish joint venture partnerships in new markets,” said Zach Ferguson, a managing director with TPG Growth.” TPG has a long history of innovative partnerships with leading health systems, including through our investments in GoHealth Urgent Care and Surgical Care Affiliates, among others. We look forward to investing in the future growth of MedQuest to ensure best-in-class care for patients nationwide.”

We expect to a wave of more imaging deals this year. Click here to read the whole story.

Cataract treatment. A subsidiary of Bausch + Lomb has acquired AcuFocus, following a merger transaction with the parent company of AcuFocus, which is a KKR-backed ophthalmic medical device maker.

The Irvine, California-based company produces the IC-8 Apthera EDOF Intraocular Lens (IOL), which was approved by the US Food and Drug Administration last year and is currently available in Australia, New Zealand, Singapore and select markets across Europe.

“Cataracts are the largest contributor to global blindness in adults aged 50 years and older, with more than 15 million individuals, or approximately 45 percent of the more than 33 million cases of global blindness,” said Joseph Papa, CEO, Bausch + Lomb. “We believe that the IC-8 Apthera EDOF IOL will bolster our surgical portfolio by enhancing our IOL offerings, which is a strategic area of focus for Bausch + Lomb. We will continue to focus on areas of unmet medical need that we believe will help drive long-term growth in our core segments, and importantly, help us achieve our mission of helping people see better to live better.”

Virtual health. ReviveHealth, a whole health and integrated care company backed by Eir Partners, has acquired SwiftMD, a virtual care services company with a physician network.

“Through our partnership, ReviveHealth is in a strong position to innovate, scale, and create lasting transformative value,” said Howard Buff, ReviveHealth executive chairman. “Along with our recent acquisitions of ManifestRx, iSelectMD and now SwiftMD, ReviveHealth has rapidly advanced its contemporary approach to the traditional healthcare delivery system by offering a broader suite of on-demand health services previously unavailable.”

Based in Miami, Eir Partners invests in high growth healthcare companies.

“It is a massive opportunity and unmet need in the market to deliver a truly disruptive employee healthcare experience,” said Brett Carlson, managing member at Eir Partners. “We can do much better in this country, and we believe we have the leadership, solution set, and mission to execute on our ambitious vision.”

Schedule note. As MK Flynn mentioned yesterday, today is my last time writing the Wire. I want to thank everyone for waking up and reading and welcoming me to the community.

Buyouts’ Chris Witkowsky will write the Wednesday Wire, as usual, and MK will be back on Thursday. PE Hub reporter Obey Martin Manayiti will make his debut writing the Wire on Friday.