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Why The Oncology Institute’s merger with Deerfield’s SPAC is the first of its kind, PSG-backed Lumaverse awaits 2nd round bids

The Oncology Institute jump-starts next wave of value-based care while PSG's Lumaverse seeks buyer.

Morning, everybody!

On the heel’s of Deerfield Management’s latest healthcare SPAC announcement I got the opportunity to pick the brains of several folks around the transaction. Here’s a quick preview of what I learned:

The Oncology Institute is merging with a SPAC sponsored by Deerfield and veteran healthcare executive Richard Barasch – underscoring the arrival of a new kind of value-based care company looking to revolutionize the way cancer care is delivered and paid for.

The last few years have produced a number of illustrious transactions involving value-based primary care. Activity has only accelerated through covid, with such assets gaining even more traction amid the proliferation of SPACs and a receptive IPO market.

But TOI, backed by Havencrest Capital Management, ROCA Partners and M33 Growth, is arguably the first of its kind. The SPAC transaction – assigning the combined company an enterprise value of approximately $842 million – could spark a wave of new investment around value-based specialty healthcare groups, PE Hub sources predict.

“To me, there’s going to be three waves of value-based care,” Brad Hively, who joined TOI as CEO in late 2019 after spending years in private equity (most recently RLH Equity), told PE Hub. “Primary care has led it; that’s the first wave. The second wave we’ve kicked off with specialty value-based care. The facilities will be the third to come onboard.”

At the same time, TOI is a direct beneficiary of the broader growth in value-based care.

“What’s incredibly interesting is the growth of primary care is accelerating the growth of TOI,” said Richard Barasch, who previously led Universal American Corp as CEO through its 2017 sale to WellCare.

For most health plans, oncology is one of the three most expensive specialties, alongside cardiology and ophthalmology, but oncology is growing faster. Those markets, among others like orthopedics and nephrology, are specialties where Hively expects to see effort and investment to replicate TOI’s value-based model.

Read more on the deal’s importance on PE Hub, with more commentary from Hively and Barasch, as well as ROCA’s Ravi Sarin and Havencrest’s Christopher Hersey.

Awaiting bids: PSG-backed Lumaverse Technologies, a provider of management and engagement software for non-profits and education, has entered the second round of its sale process, sources told PE Hub.
First-round bids valued the company between 11x and 13x EBITDA, one of the sources said. However, another source indicated that bids came in higher, above 14X EBITDA, valuing the company at more than $140 million.

Providence Strategic Growth, or PSG, initially invested in the business in July 2017 through an investment in one of its current products, SignUpGenius, which provides online sign-up technology. In June 2020, PSG announced a launch of Lumaverse as a platform to house existing portfolio companies like SignUpGenius, among other brands of a similar vein.

The process comes as software assets tailored to non-profits and philanthropies grow increasingly popular among private equity firms in the post-covid world. Consider Vista Equity Partners-backed Social Solutions, currently in the market.

For more on the process and sector, check out Milana’s full report on PE Hub.

That’s it for today! Have a beautiful rest of the week and as always, hit me up with updates on deals, your comments, feedback or whatever at

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