Private Equity Deal Spotlight | Weekly Update

Health care continues to drive private equity (“PE”) activity, creating opportunities for investors and traditional health care providers. Transactions in the health care space are especially complicated, layering health care regulatory and reimbursement considerations on top of a complex securities, antitrust, privacy and security framework.

Hall Render’s PE team of attorneys and advisors leverage the strength and depth of our bench to navigate and efficiently execute PE transactions. The summary below includes highlights of recent PE deals and legislative updates.

• Sen. Ed Markey (D-Mass.) has released a discussion draft of the “Health Over Wealth Act.” The bill is aimed at PE and other for-profit health care providers providing Medicare services under 42 U.S.C. Section 1395f (e.g., hospice, nursing homes). It would require owners of PE funds to disclose to HHS, among other things, fees and dividends paid by the health care entity to the PE fund, staffing, debt and health care costs charged to patients and public and private health plans. In addition, the proposed bill would require PE funds to obtain a revocable license to invest in health care entities. Further, the proposed bill would require HHC to establish mechanisms to mitigate risks attributed to for-profit ownership of health care entities.
• Surescripts, a health care IT giant, is reportedly seeking a buyer. It has enlisted the help of TripleTree to explore a potential sale, possibly to a PE firm, due to Surescripts’ ownership structure (which includes CVS Health, Cigna-owned PBM Express Scripts and two pharmacist trade groups).
• Pediatric anxiety and OCD treatment provider InStride Health has closed an oversubscribed $30M Series B funding round led by General Catalyst. With this funding, InStride Health aims to expand into new markets and continue investing in clinical quality. The company’s total funding is currently at $56M.
• Apotex, a portfolio company of private investment firm SK Capital, is set to acquire Searchlight Pharma, a Montreal-based pharmaceutical company in the specialty health care products sector.
• Clarion Capital Partners has closed its oversubscribed fourth fund, Clarion Investors IV, L.P., securing $677M in total capital commitments. David Ragins has been promoted to President of Private Equity, while Marc Utay continues as Managing Partner.
• Health care finance veteran Dominic Brignola has joined Surgical Notes, a billing services provider for ASCs and surgical hospitals, as Chief Financial Officer. Surgical Notes is backed by Capstreet, a Houston-based lower middle market PE firm.
• New York-based principal investment firm Garnett Station Partners has launched Accident Care Alliance (“ACA”), a specialized platform that provides holistic care for individuals injured in automobile accidents. ACA aims to improve the services available to injured patients and deliver better patient outcomes in the “highly fragmented” accident injury health care market.