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The Healthcare Investor

Insights on Issues & Trends that Impact Investments in Healthcare & Life Science Businesses

Cressey & Co Raises Close to $1 Billion for New Healthcare Fund

Posted in Healthcare Services Investing

Cressey & Company has announced the closing of its sixth fund, Cressey & Company Fund VI, at $995 million.

The company also announced the closing of a $105 million co-investment fund.

Cressey, with offices in Chicago and Nashville, seeks control and minority equity investments in middle-market companies exclusively in healthcare.

The firm indicated it would use the $1.1 billion in new capital commitments to support investing in and building healthcare services and information technology businesses in North America.

Women in Private Equity to Know: Susan Nickey

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are profiling women leaders in private equity throughout 2018. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. This month, we are pleased to feature Susan Nickey of Hannon Armstrong. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com

Healthcare & Life Sciences Private Equity Deal Tracker: Parachute Health Secures $9.5 Million in Funding

Posted in Healthcare Services Investing

Parachute Health has announced it has secured $9.5 million in new funding.

The funding round was led by Harley Miller and Dan Ahrens of Insight Venture Partners and includes investments from GNYHA Ventures, the business arm of the Greater New York Hospital Association, and Anthony Welters, formerly of UnitedHealth Group.

Parachute Health, based in New York, is a healthcare technology platform designed to assist with the ordering of medical equipment and services for patients following discharge from a hospital.

The company indicated that the money from the funding round will be used to expand its ePrescribing platform into key U.S. markets.

Parachute previously announced in March that it had raised $5.5 million from investors including Loeb Holding Corp.

Strata Oncology Secures $26 Million in Funding

Posted in Healthcare Services Investing

Strata Oncology has announced it has secured $26 million in series B funding.

Strata, based in Ann Arbor, Mich., describes itself as a precision oncology platform company.

New investors in the company were Pfizer Ventures, Merck Global Health Innovation Fund, Deerfield Management and Renaissance Venture Capital Fund. They joined existing investors Arboretum Ventures and Baird Capital.

Strata indicated it intends to use the latest round of funding for multiple purposes, including expanding its client base and further developing solutions.

Women in Private Equity to Know: Maureen Spivack

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are profiling women leaders in private equity throughout 2018. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. This month, we are pleased to feature Maureen Spivack of New State Capital Partners. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com

Venture Investors Raising Healthcare Fund Targeting $100 Million

Posted in Healthcare Services Investing

Venture Investors is raising a new healthcare venture fund, according to a PE Hub report citing an SEC regulatory filing.

The firm is targeting $100 million for the fund.

Venture Investors, with offices in Madison, Wyo., and Ann Arbor, Mich., seeks to make early-stage investments in healthcare, specifically within the therapeutic, diagnostic and tools, medical device and IT sectors. The firm focuses on the Midwest, with initial investments ranging from $250,000 to $2.5 million.

Linden Capital Raises $1.5 Billion for New Fund

Posted in Healthcare Services Investing

Linden Capital Partners has announced the closing of its fourth private equity fund with $1.5 billion.

Linden Capital Partners IV was oversubscribed, exceeding a $1.25 billion target. The fund will target middle-market healthcare companies in sectors including services, medical products, specialty distribution and pharmaceuticals.

Linden Capital, based in Chicago, is a PE firm focused exclusively on leveraged buyouts in the healthcare and life sciences industries.

Women in Private Equity to Know: Rena Clark

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are profiling women leaders in private equity throughout 2018. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. This month, we are pleased to feature Rena Clark of Laurel Oak Capital Partners. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

Focused Hospital Investments: Psych Hospitals, Micro-Hospitals, Surgical Hospitals, Specialty Hospitals & Other Hospital Investments – 5 key points

Posted in Healthcare Services Investing

The next in our series of posts sharing key takeaways from panels at the Healthcare & Life Sciences Private Equity and Lending Conference focuses on opportunities for investment in micro-hospitals and other specialty hospitals. It is authored by our colleagues Jeff Peterson and Sarah Mick.

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Focused Hospital Investments: Psych Hospitals, Micro-Hospitals, Surgical Hospitals, Specialty Hospitals & Other Hospital Investments – 5 key points

By Jeff Peterson and Sarah Mick

Investors’ and providers’ interest in micro-hospitals and other specialty hospitals has grown as the delivery of healthcare has increasingly shifted from large, full-service acute care hospitals to smaller, lower cost, and more focused settings, according to experts who spoke on a panel at McGuireWoods 15th Annual Healthcare and Life Sciences Private Equity and Finance Conference on February 21.

Experts included Samuel Cappellanti, President, Bellwether Group, LLC and Jeffrey Peterson, Partner, McGuireWoods LLP with Rex Burgdorfer, Vice President, Juniper Advisory as the panel moderator.

Here are five key points from the panel discussion.

1. Facilities such as micro-hospitals, psychiatric hospitals and other specialty hospitals have been touted as having the capacity to offer lower cost, patient-centric care that is more highly tailored to the applicable populations’ needs. Micro-hospitals, in particular, can play an important role in areas where there is not enough demand for a full-sized/full-service hospital and can serve as a backup to community hospitals in other areas. When part of a larger healthcare system, these micro-hospitals can serve as a portal into the healthcare system for higher acuity patients.

2. A significant amount of recent activity in the specialized hospital field has involved partnerships and joint ventures among specialty operators, health systems, real estate investment trusts, and private equity funds. For example, private equity-backed Emerus has partnered with large health systems such as Dignity Health and Baylor Scott & White Health. REITs have often been involved in such deals helping to defray some of the initial capital costs.

3. Many larger hospitals and health systems have faced challenges due to economic pressures and uncertainty from reimbursement programs, such as potential changes with the 340B drug discount program and site-neutral payment policies, healthcare-related budget cuts in the President’s proposed Federal budget and continued emphasis on value-based care coupled with declining fee-for-service rates. This pressure not only affects existing hospitals and health systems, but it makes them re-think where to spend their limited capital in order to best serve their patient populations and fulfill their missions.

4. The new Secretary of the U.S. Department of Health and Human Services, Alex Azar, indicated that he is open to rethinking the ban on new physician-owned hospitals. If these ownership restrictions are lifted, it could present significant opportunities in the hospital sector for private equity investors in partnership with physician investors.

5. It appears that in response to the surge in micro-hospitals, the Centers for Medicare and Medicaid Services (CMS) issued guidance in late 2017 on the statutory definition of “hospital” and whether a hospital is “primarily engaged” in providing inpatient services. This guidance could present certain growth challenges to micro-hospitals and smaller specialty hospitals. CMS clarified that a hospital must have two inpatients at the time of survey in order for surveyors to directly observe the actual provision of care to inpatients. Additionally, CMS clarified that the use of benchmarks for average daily census and average length of stay will be two primary factors utilized to determine whether a hospital is “primarily engaged” in providing inpatient services. These hospitals and investors in this space will want to pay particular attention to these factors, among the others that CMS states it will consider in such an analysis.

Healthcare & Life Sciences Private Equity Deal Tracker: TPG Capital, Welsh, Carson, Anderson & Stowe and Humana to Acquire CURO Health Services

Posted in Healthcare Services Investing

Private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS) are joining with Humana to acquire CURO Health Services for approximately $1.4 billion, according to a news release.

CURO Health Services, based in Mooresville, N.C., is a national hospice operator providing care to patients at 245 locations in 22 states.

TPG Capital, headquartered in Fort Worth, Texas and San Francisco, targets investments in middle-market companies in healthcare and a number of other industries.

WCAS, based in New York, targets growth-oriented companies within the healthcare and information/business services industries.

The CURO transaction is anticipated to close during the summer of 2018. Announcement of the acquisition comes less than six months after TPG, WCAS and Humana agreed to acquire Kindred Healthcare in a $4.1 billion deal.

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