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.

• Central Ohio Urology Group, a PE-backed urology practice, announced a partnership with Prostate Centers USA to launch an interventional radiology center in Columbus, Ohio. The center will offer cutting-edge urology services such as prostate artery embolization, a minimally invasive solution for benign prostatic hyperplasia. Central Ohio Urology Group is an affiliate of U.S. Urology Partners, which is supported by NMS Capital, a New York-based PE firm founded in 2010 seeking investments in middle-market companies in the health care services industry.
• Green Bay, Wisconsin-based Caravel Autism Health is nearing a deal with the PE firm GTCR. The investment by GTCR represents an increasingly rare large-scale transaction involving developed organizations in the Autism therapy industry. According to the Braff Group, Autism deals were down 46% from 2022 to 2023. Industry experts predicted a deal of this size might unclog a perceived bottleneck in the Autism therapy industry and increase interest and demand for these types of assets. GTCR is a Chicago, Illinois-based PE firm focused on leveraged buyouts and recapitalization, growth capital and rollup transactions in the health care market.
• Goldman Sachs Alternatives announced the acquisition of Xpress Wellness, LLC, an affiliate of urgent care providers and other health care services to rural communities from Latticework Capital Management. The transaction positions Xpress Wellness to accelerate its footprint by expanding and providing urgent care services to more underserved communities throughout the United States. Xpress opened 30 de novos and completed seven acquisitions under Latticework’s ownership. Goldman Sachs Alternatives is part of the larger Goldman Sachs Asset Management, which delivers investment and advisory services across public and private markets. Latticework Capital Management is a Texas-based growth-oriented PE firm focused exclusively on the health care industry with more than $550 million in assets under management.
• Gen4 Dental Partners, a portfolio company of the Thurston Group, recently closed on a $315 million credit facility. Gen4 Dental Partners is a leading dental service organization providing comprehensive practice support to dental practices across the United States. The funding is intended to provide Gen4 Dental partners with the flexibility and resources to expand their footprint, invest in technology and continue delivering care across the United States. The Thurston Group is a PE firm that focuses on building industry-leading companies in the health care market through partnerships with physicians, including Smile Doctors, U.S. Endodontics and U.S. Orthopaedic Partners.
• A joint venture between Blue Owl’s GP Strategic Capital platform and Lunate Capital made a minority investment in Linden Capital Partners, a health care PE firm based in Chicago. Linden Capital Partners has invested in more than 45 health care companies across more than 350 transactions. This minority investment aims to support the continued growth of Linden Capital Partner’s investment platform by adding flexibility to the firm’s balance sheet. Linden Capital Partners largely invests in middle-market platforms such as health care services, medical products and specialty distribution sectors.
• According to data firm Pitchbook, PE transactions in the health care market are declining due to a negative regulatory environment and high interest rates. For instance, in the first quarter of 2024, PE health care sponsors announced or closed roughly 158 transactions, compared to over 200 during the same timeframe in 2023. Despite the slow start to 2024, we expect PE transaction announcements to increase throughout the third and fourth quarters of 2024. The stall in early 2024 is likely due, in part, to longer overall transaction timelines.