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FFL eyes proprietary opportunities in healthcare; plus healthcare deals led by HGGC and others

Happy Fri-yay, Hubsters! Aaron here to end the week.

Today we have a healthcare-focused edition of the Wire. To kick things off, FFL shares insights on dealmaking in the sector.

Then, we’re going to round up some healthcare deals that came through this week from HGGC, Avesi, Thurston, NMS and Centre Partners. The deals feature mental health, dental practices and clinical trials.

Finally, we’ve got a look at people moves being made by Devon Park.

Healthcare heartbeat. Continuing with PE Hub and PE Hub Europe’s outlook series, we have some fresh thoughts from Karen Winterhof, a partner at FFL Partners.

Here’s an excerpt from our Q&A:

How do you expect the first six months of PE dealmaking in 2023 to compare with the last six months of 2022?

It feels like banker-driven deal flow will likely remain slower for the next few months, but we are still seeing interesting companies in our pipeline, including some proprietary opportunities coming out of our Sector Exploration and Expertise Development process.

We have seen some direct lenders become more active on the new deal front compared to Q4 2022, but we still need to see more supportive credit markets for deal volumes to pick up meaningfully.

You can read the whole story here.

Mental health. Two deals that interested me this week were in the mental health space.

Avesi Partners invested in Muir Wood, a provider of integrated, adolescent-focused behavioral health services.

And ARC Health, which is backed by Thurston Group, acquired The Lilac Center, a mental health care provider group.

Formed in 2021, ARC Health is a group of mental healthcare practices. The group has practices, psychiatrists, psychologists, and therapists in Connecticut, Georgia, Michigan, Minnesota, New York, North Carolina, Ohio, Tennessee, Virginia, and Washington, D.C.

The Lilac Center adds Kansas and Missouri.

Dental deals. Two other deals that caught my eye this were in the dental space.

I wrote an exclusive earlier in the week about how HGGC made a majority investment in Dentive, a dental services organization founded in 2019.

This is the first outside capital for the company, which provides management services to entrepreneurial, doctor-run general and specialty dental practices, primarily in the western US.

“The doctor ownership model that Dentive has, we’ve had a chance to look at a number of different DSOs and compare and contrast different models, and we think their ownership or equity model is really a compelling model,” said Pat Dugoni, principal, HGGC.

Under HGGC’s model, a partner dentist or practice that’s acquired by Dentive will roll equity to maintain some ownership of the actual practice. Then they also have the opportunity to invest or roll equity into the broader Dentive platform where HGGC has invested.

You can read the whole story here.

In another dental deal, Cordental Group, which is backed by NMS Capital, has acquired two practices: Cincinnati-based Rogers Family Dentistry and St.-Lous-based Dr. Allan Link DMD.

Based in Cincinnati, Cordental Group is a dental support organization that provides business support services to affiliated dental practices across the Mid-Atlantic, Midwestern, and Southeastern U.S.

Clinical trial transaction. The IMA Group, which is backed by Centre Partners, has acquired Clinical Trials of America.

The transaction marks the seventh acquisition the IMA Group’s clinical research division has completed since 2018 and the 15th total acquisition for the company in the same period.

People moves. On a different note, one firm the Buyouts team has been watching has been bulking up lately. The advisory shop formed by secondaries veteran Jonathan Costello, called Devon Park, has made a few hires over the past few months.

The shop, which works with GPs on secondaries deals, brought on ex-Whitehorse Liquidity Partners executive Sebastien Siou to focus on GP-leds as well as management company financing transactions. Devon Park hired late last year Ian McLean from Oaktree as a managing director, and Matthew Pellegrino as a director from Committed Advisors.

You can read the whole story here.

That is a wrap for me. I am looking forward to resting and relaxing after a busy week! Wishing everyone a wonderful weekend!

MK Flynn will be with you on Monday, and I’ll be back Tuesday. Until then…

Cheers,

Aaron

Read thefull wire commentaryon PE Hub …

Also of note (may require subscriptions)

San Francisco Employees’ Retirement System will modify its private equity program and increase the limits allowed for secondaries purchases. (Buyouts)

Private companies are expected to face a rocky 2023 as the full effects of last year’s upheaval take root. However, private equity – with its continuing high levels of dry powder – could land on some opportunities. (Private Equity International)

$1 trillion in annual volume just got a step closer with Blackstone’s raise: LP secondaries is a scalable business, meaning firms like Strategic Partners can raise funds twice the size of their predecessors without doubling the size of their teams. (Secondaries Investor)

The SEC doesn’t publish its exam priorities until the end of the first quarter, but speakers at Private Equity International’s 20th CFOs & COOs Forum said they expect valuations, conflicts of interest and compliance with the new Marketing Rule to be top areas of focus for private fund examiners in 2023. (Private Equity International)

Private equity has long sought an efficient way to marry the varied needs of private wealth investors with its own set of requirements. It appears to have found that in semi-liquid products. (Private Equity International)

Rising input costs and interest rates mean last year’s US grain production could represent the peak of modern agriculture’s third super-cycle, according to a Farm Credit Services of America senior vice-president. (Agri Investor)

A handful of asset owners are blurring the lines of traditional asset classes for climate opportunities. (New Private Markets)

"KKR has become the latest investment manager to limit withdrawals from a property fund, following rival Blackstone Group in imposing curbs after a surge in redemption requests from clients." (Financial Times)

"The last two years have brought a flurry of new private investments in space companies, as inflation and supply-chain issues have dampened the enthusiasm for other sectors, and also because many space contractors have long-term government contracts to sustain them." (Bloomberg Law)