Deal Activity Alerts: Sector & Company Updates
Author: JC Lupis
Friday January 15th, 2021
Sector Alert! A new PE darling? ENT activity on the rise.
ENT (or otolaryngology) remains in the early stages of consolidation, but we’re seeing indications of increased dealmaking in this vertical. PE firms may be attracted by the broad swathe of the population needing treatment, the diverse service lines offered, and the strong demand profile.
Here are the deals announced in the past week or so, headlined by a new PE-backed platform.
- Audax Private Equity has backed the merger of South Florida ENT Associates and Texas ENT Specialists, forming an entity that will support more than 60 ENT centers and immediately making this one of the largest practices in the nation. The company is seeking new partnerships in Florida and Texas but will also expand into other markets. (Press release, 1/11/21)
- ENT Partners, a portfolio company of Candescent Partners, reported a pair of transactions made in late 2020. In one, ENT Partners acquired Specialty Care Institute, a 3-location provider in the Chicago area consisting of two board-certified otolaryngologists, a facial plastic and reconstructive surgeon, and two audiologists. In the other, ENT Partners picked up Maryland ENT Center, a three-location provider in the Baltimore area with 3 board-certified otolaryngologists. (Press release, 1/12/21)
- ENT Partners also added to its Chicago-area presence, reporting its acquisition of Arlington ENT – Head & Neck and Facial Plastic Surgery, representing ENT Partners’ third practice in the Chicago area. (Press release, 1/7/21)
See also: GHA Q&A with Rapidly-Expanding ENT & Allergy Platform SENTA Partners
Sector Alert! A pair of PE-backed urology deals.
Urology has also been developing into an appealing vertical for PE investment, driven in part by its multiple revenue streams and whitespace opportunity. There are now 5 PE-backed platforms (6 if you include last week’s Integrated Oncology Network’s partnership with Southwest Urology), and add-on activity appears to be accelerating. This week brings the following news, headlined by the formation of the largest urology group in the country.
- Solaris Health, formed last year by Lee Equity Partners as a partnership between Integrated Medical Professionals and The Urology Group, has welcomed MidLantic Urology Partners, a large practice headquartered in Philadelphia with 65 physicians. This creates what Solaris Health bills as “the nation’s leading independent provider of urological and other specialty services.” The transaction results in a practice with more than 220 providers with over 850,000 annual patient encounters across more than 100 sites in 5 states (New York, Ohio, Pennsylvania, Kentucky, and Indiana. (Press release, 1/12/21)
- United Urology Group, an MSO backed by Audax Private Equity, has expanded in Arizona with two new affiliates: Arizona Institute of Urology and Urological Associates of Southern Arizona. The two new affiliates operate out of 10 medical offices and 2 radiation therapy centers in the greater Tucson area. (Press release, 1/11/21)
See also: 25 Statistics About the Urology Market
Company alert! Audax is on a roll.
Finally, Audax Private Equity deserves a mention for its activity this week, with platform deals and some add-ons, to boot. Not only did Audax invest in the ENT sector (as mentioned above), but it may have heralded the beginning of another vertical to keep an eye out for with its strategic investment in Global Nephrology Solutions. This week Audax also teamed up with Linden to acquire StatLab Medical Products, while PE Hub reported add-on activity for its portfolio company Active Day, which were in addition to the add-ons noted above for United Urology Group. (Separately, PE Hub also reported last Friday that Audax-backed Axia Women’s Health had made an add-on acquisition, this news being followed on Monday by a new report that Axia Women’s Health is preparing for a possible sale.)
Friday January 8th, 2021
Sector Alert! Gastroenterology has had a hot start to the year.
PE-backed gastro platforms have wasted no time in announcing new deals this year. This week in the Daily Note we’ve already covered the following transactions:
- GI Alliance (backed by Waud Capital) partnered with Digestive Health Associates of Texas, which has over 90 adult and pediatric gastroenterologists across more than 60 locations throughout Dallas-Forth Worth. (Press release, 1/6/21)
- GI Alliance also announced a partnership with GI Associates of Chicago, a gastro and hepatology practice with 5 physicians and 2 locations. (Press release, 1/5/21)
- But wait… there’s more. GI Alliance again, this time partnering with Cleburne Endoscopy Center, an ASC that’s located 35 miles from downtown Forth Worth. As part of the transaction Dr. Yevgeniy Ostrinky will be joining the GIA Alliance. (Press release, 1/5/21)
- One GI (backed by Webster Equity Partners) made its first post-formation partnerships, welcoming to the fold both Associates in Gastroenterology (AIG) and Gastroenterology Associates and Endoscopy of North Mississippi (GANM). AIG employs 11 doctors and 6 advanced practice providers across 5 locations in Northern Virginia, while GANM has 6 physicians and 2 nurse practitioners working from 3 locations and an endoscopy center. (Press release, 1/4/21)
Sector Alert! CDMOs are also seeing a lot of early activity.
GI Alliance may have powered a fast start to the year for gastro M&A, but contract development & manufacturing organizations (CDMOs) are also seeing their fair share of deals, including from PE sponsors:
- Vivo Capital has made a majority investment in Serán Bioscience, a CDMO with more than 50 employees at its facilities in Bend, Oregon. Its “specialized expertise in enhanced solubility and engineered particle formulations” were cited by Vivo Capital as having particular appeal. (Press release, 1/6/21)
- MilliporeSigma (the life science business of Merck, operating as MilliporeSigma in the US and Canada) acquired AmpTec, a German CDMO specializing in mRNA therapeutics and PCR technology. Awareness of mRNA has of course risen in the public consciousness given the success of mRNA-based vaccines developed by Pfizer/BioNTech and Moderna. (Press release, 1/7/21)
- SK Capital agreed to acquire Catalent‘s Blow-Fill-Seal sterile CDMO business operating out of a facility in Woodstock, Illinois, forming a new independent business in the process. (Press release, 1/6/21)
- Genezen Laboratories, a cell and gene therapy CDMO, announced a majority investment from Ampersand Capital Partners. Unlike the above-mentioned acquired Catalent business, which concentrates on clinical to commercial stage manufacturing, Genezen is focused on early-stage process development among other services. The investment will be used to complete construction of a cGMP-compliant production facility. Keep your eye out for more activity in the cell and gene therapy space this year. (Press release, 1/5/21)
- Finally, contract manufacturers aren’t only for pharma. In another transaction, Avalign Technologies, a portfolio company of Linden Capital Partners, announced its acquisition of the assets of Slice Manufacturing Studios of Akron, Ohio. Slice is a contract manufacturer of medical devices, and was attractive to Avalign as a result of its “additive manufacturing, high tolerance subtractive manufacturing, and sterile packaging capabilities.” (Press release, 1/4/21)
Interested in the CDMO space? GHA has recent experience, having advised Japan’s Seikagaku Corporation in its 2020 acquisition of Canada’s Dalton Pharma Services. Reach out to us with any questions or if you’re interested in discussing CDMOs.
