Growth investors eye healthcare services deals, Platinum Equity exits PCI

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The Wire

Sept. 22, 2021

Bench of healthcare services buyers widens as investors chase growth, Platinum Equity's PCI goes to Celestica for $306m

It’s hump day, hubsters!

Observation: Is it just me, or are more tech- and growth-focused PE firms crossing over and going after pure-play healthcare services companies, albeit high-growth ones with a disruptive model or a lot of white space?

A few recent situations support this trend. Yesterday, we saw Great Hill Partners -- predominately thought of as investing in growthy technology companies or digital models across different end markets (including a lot of healthcare) -- announce its first pure-play healthcare services deal. It made a $100 million growth investment in IVX Health, a national provider of outpatient infusion centers. Earlier this year, tech buyout behemoth Silver Lake partnered with EQT and Nestle to make an aggregate investment of €3.5 billion ($3.62 billion) in European vet care giant IVC Evidensia. Four sources have told me that another prominent technology investor has participated in recent large-scale healthcare services processes (think eye care, vision, and vet situations), but we’ve yet to see this firm strike.

“All of these tech and retail guys are looking for other sectors they can leverage expertise with one way or another,” one healthcare investment banker told me. For example, there are some parties in the sale process for Vohra Wound Physicians that fit that playbook, I wrote yesterday. In a competitive deal environment where having an angle is increasingly important, having that tech lens could...

Read the full wire commentary on PE Hub...

Have a great day, everybody! As always, write to me at [email protected] with any comments, tips or just to say hello!

Also of note (may require subscriptions)

Sophomore: Timber Bay Partners, formed by executives from Fort Washington Capital Partners to target lower-mid-market secondaries, is targeting $250 million for its second fund, according to a person with knowledge of the firm. The firm is among a handful of newer shops raising capital to target the smaller side of the secondaries market, which is busy and largely ignored by larger firms. Read it on Buyouts.

Uppin’ it: Tulare County Employees Retirement Associationvoted to increase its private equity allocation to 12 percent from 5 percent as it shifts to becoming a direct investor in PE funds. The pension would need to commit $80 million to $90 million annually over the next decade to achieve its 12 percent allocation, which can range up to 16 percent maximum, according to a presentation before the board at its September meeting. Check it out on Buyouts.