Noteworthy M&A Transactions – October 2017

NOV 22
Healthcare M&A activity in October 2017 highlights a few key themes we’ve been seeing in the market recently:
  1. Dental service organizations (DSOs) continue to attract. Earlier this year, we published an Industry Perspective on the resurgence of practice management companies and their applicability to the dental industry. We continue to track a high volume of M&A activity in this sector, largely driven by a fragmented dental provider landscape and the attractive business model dentistry offers for practice management.
  2. Healthcare staffing firms pursue inorganic growth. Healthcare staffing represents a ~$15B market and continues to be supported by a number of industry tailwinds. Hospitals and provider organizations look to staffing firms to bolster staff in support of a growing patient population, address clinician shortages and seasonal needs, improve flexibility and reduce fixed costs. The healthcare staffing landscape is also fragmented and we continue to see firms executing on inorganic growth strategies to gain market share and diversify service offerings.
  3. Evolving strategies across the PBM landscape. In our last blog, we examined a number of disruptive moves that were made in the PBM sector in October. Check out our blog for a review of some of the transformational moves.
Several transactions fitting these themes caught our eye in October:
  • MB2 Dental Solutions, a Carrollton, Texas-based DSO, received an investment from Sentinel Capital Partners. MB2 has 87 affiliated practices in Alaska, Louisiana, New Mexico, Oklahoma, Tennessee and Texas and, with the investment, plans to expand further within existing and new geographies. Later in the month, MB2 announced its acquisition of Taos Dental Group, a doctor-owned dental practice in New Mexico, further expanding MB2’s presence in the state. The financial terms of these deals were not disclosed.
  • Smile Doctors, a Georgetown, Texas-based orthodontic dental support organization was recapitalized by Linden Capital. The investment will allow Smile Doctors to further expand its brand, culture, patient experience and clinical excellence to more communities across the U.S. Both the management team and the company’s former investor, Sheridan Capital Partners, are rolling over equity in the transaction. The financial terms of this deal were not disclosed.
  • Webster Capital acquired Charlotte, North Carolina-based Cirrus Medical Staffing, a provider of travel nurse and travel allied healthcare professionals. Cirrus’ employee staffing and recruitment services, offered through assistance such as interview coaching, resume preparation and 24/7 on-call phone support, enables registered nurses and rehabilitation therapy professionals to get into travel and contract positions with healthcare facilities throughout the nation. The financial terms of this deal were not disclosed.
  • American Health Staffing Group (AHSG), an Edmond, Oklahoma-based provider of temporary healthcare staffing services and a portfolio company of BelHealth Investment Partners, announced that it has acquired Advance Med, a Frisco, Texas-based provider of travel staffing solutions to hospitals nationwide. Having acquired Expedient Medstaff in August 2017, this transaction represents AHSG’s second acquisition this year and clear indication the company is executing on an inorganic growth strategy. The financial terms of these deals were not disclosed.
  • GrapeTree Medical Staffing, an Iowa-based healthcare staffing agency, has been recapitalized by New MainStream Capital. As part of the transaction, New MainStream Capital has committed ‘substantial capital’ to support the future growth of GrapeTree, including via strategic acquisitions. GrapeTree provides New Mainstream Capital with a platform for building a large provider of CNA and RN staffing to long-term care facilities. The financial terms of this deal were not disclosed.
  • Express Scripts announced the signing of a definitive agreement to acquire eviCore, a provider of evidence-based medical benefit management services, for $3.6 billion. The acquisition will allow Express Scripts to expand into medical benefit management services and accelerate its shift to patient benefit management.
  • In addition to the M&A activity within the PBM sector discussed in our last blog, Comvest Partners made an undisclosed investment in Citizens Rx, an Oak Park, Illinois-based provider of pharmacy benefit management services. The company previously received an undisclosed equity investment from Capricorn Healthcare in August of this year. The investments will be used to support the company’s growth initiatives.
TripleTree and TT Capital Partners continuously monitor the market to identify the trends impacting the healthcare industry and deliver uncommon clarity to our clients and investors. Thanks for reading!

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Nick Wardell
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