PE Deals

Warburg’s CityMD to buy Spanos Barber Jesse-backed Stat Health

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CityMD, healthcare, private equity, urgent care, medical services, Warburg Pincus
CityMD branch at 561 Third Avenue, Manhattan, on Feb. 22, 2017. Photo by Buyouts Staff.
  • Warburg bought CityMD in reported ~$600 mln deal
  • SBJ invested in Stat Health in 2016
  • CityMD urgent-care network would grow to 100 locations

Warburg Pincus’s urgent-care network CityMD is making good on its pledge to expand through M&A.

CityMD, whose walk-in clinics already dominate much of the New York City market, is nearing a deal for Long Island chain Stat Health Management, according to three sources familiar with the matter. The anticipated transaction is valued just south of $100 million, the sources said.

The seller is Spanos Barber Jesse & Co, a lower-middle-market firm out of Walnut Creek, California, and Dallas. SBJ’s investment in Stat Health dates to May 2016.

Separately, CityMD is poised to buy FirstMed Immediate Medical Care, a single urgent-care clinic in the NYC borough of Queens, one of the sources added.

The addition of 12 Stat Health centers and FirstMed would bring CityMD’s network to 100 urgent-care locations. While largely concentrated in the NYC metro area, CityMD also has walk-in clinics throughout New Jersey and Washington state.

For CityMD, the anticipated add-ons are its first since its 2017 sale to Warburg Pincus.

New York’s Warburg Pincus in April 2017 prevailed in a JPMorgan-run auction for CityMD, ultimately buying a majority stake that Reuters said valued the company at $600 million including debt.

KKR and UnitedHealth Group were among other parties that expressed interest in the CityMD auction, Buyouts previously reported.

CityMD’s strong brand recognition and footprint in an industry that has few platforms of scale are a couple of factors said to have fueled interest in the company.

At the same time, healthcare investors have increasingly opted to invest in lower-cost settings of care outside hospitals.

Summit Partners previously backed CityMD, injecting $95 million in the company in January 2014, a Provident Healthcare Partners industry update at the time said.

CityMD under the Warburg Pincus umbrella has also made some changes in the C-suite, including bringing in longtime investment professional Quentin Chu as CFO. Chu joined from Crestview Partners, where he most recently served as a partner during his 12-plus years with the New York firm.

Richard Park, a physician, has led CityMD as CEO for more than seven years.

Representatives of Warburg declined comment, while those with SBJ, CityMD and Stat Health didn’t return requests for comment.

Action Item: Contact CityMD CEO Richard Park: +1 212-913-0828

CityMD branch at 561 Third Avenue, Manhattan, on Feb. 22, 2017. Photo by Buyouts Staff.