Wellspring finds value in healthcare assets misunderstood, Long Ridge preps sale of ProcessUnity, Gastro Health goes to OMERS

Wellspring healthcare finds opportunity in dislocation and Long Ridge readies ProcessUnity sale.

Morning, readers!

This morning we’ve got a deep dive on one investor that went from 0 to 40 percent healthcare in less than a decade, another tech scoop to have on your deal opportunities radar, and a highly-anticipated gastro deal coming to fruition.

Fishing where others are not: In an industry fraught with competition, Wellspring Capital Management has built a stout healthcare franchise from scratch over the past decade by backing businesses often overlooked by its peers due to complexities around reimbursement, regulations or operations.

It is a strategy that is already paying off. Over the past nine years, Wellspring has executed $4 billion-worth of healthcare transaction value through six platforms and more than 30 add-ons. The portfolio has produced a roughly 50 percent gross IRR to date, accounting for some recent investments, according to a source close to the firm.

Most recently, it exited Help at Home, which commanded an approximately $1.4 billion valuation when Wellspring sold a majority stake to Centerbridge Partners and Vistria Group, PE Hub wrote in August. Flash back six years ago, when Wellspring invested, the non-medical side of home care, where such companies assist seniors with daily living activities, was not viewed to be an important part of the post-acute ecosystem – which it has clearly proven to be.

“We’ve been willing to roll up our sleeves and get comfortable with certain issues and themes at moments in time where others haven’t,” said Naishadh Lalwani, a partner who co-heads Wellspring’s healthcare effort with Co-President and Managing Partner Alex Carles.

To be sure, it’s about finding assets misunderstood, not about looking for low prices. “What’s critical is the real discipline around not falling prey to adverse selection,” Carles said.

Read more on Wellspring’s healthcare playbook and their latest platform, HealthPro Heritage, on PE Hub.

For sale: Long Ridge Equity Partners is preparing a sale of ProcessUnity, a software provider of cloud-based applications for risk and compliance management, sources familiar with the process told PE Hub.

Raymond James will provide financial advice on the process, which is expected to launch within the next month, the sources said. The sale is expected to attract both private equity firms and strategics.

Long Ridge is also preparing to sell a minority stake in Carson Group, a provider of wealth management services to financial advisors and clients, PE Hub reported last month.

Get the full rundown from Milana on PE Hub.

You heard it here first: OMERS this morning announced it is partnering with Gastro Health, a national platform in the U.S. supporting medical groups specializing in the treatment of gastrointestinal disorders, nutrition, and digestive health. Read our brief on the deal.

PE Hub first wrote in February that Audax Private Equity, about five years into its investment, was preparing for a sale of the gastroenterology physician practice management provider.

Besides white space for growth through consolidation and additional ancillary services, Gastro Health was likely to appeal to potential suitors given its success expanding outside of its Southern Florida roots, sources said then.

At the time, sources placed EBITDA at approximately $65 million, noting that scale platforms in the space ought to command 15x-plus. Know where value panned out? Hit me up.

That’s it! Have a great week ahead. As always, hit me up with tips, feedback or whatever at springle@buyoutsinsider.com.