Given these trends, PE firms and sponsor-backed corporations are chomping at the bit for mental and behavioral healthcare opportunities, sometimes paying multiples in the low- to mid-teens for a businesses above $2 million EBITDA. In mental and behavioral health, understanding of an investment target’s economies of scale relative to competitors will determine success, as well as investors’ exposure to services with tighter or changing reimbursement policies. We are operationally-focused, research-driven, and technology-enabled. Read More >>, Consonance Capital Partners Makes Investment to Support the Merger of Summit Medical Group and CityMD Audax Private Equity — Founded in 1999, Audax focuses on investments in middle-market companies and has a wide flexibility on investment size. Several of these firms have already seen an increase in inbound demand from ready and prepared healthcare sellers looking to initiate a quick process before the market potentially chills. Lower middle-market firms operate in highly fragmented and very profitable industries, making them prime targets for acquisition and consolidation. The universe that we analyzed is large and extends well beyond firms in which RCP has invested. Promus Equity is an investment firm dedicated to helping business owners and managers build successful companies. Middle market companies and private equity funds rely on our creative solutions, thoughtful insight and truthful advice when considering exiting their companies, making strategic acquisitions, partnering with private equity sponsors and raising debt or equity capital.and raising debt or equity … Skyline Global Partners LLC is a lower middle market private equity firm based in Chicago, Illinois. Firm Overview. lower middle-market private equity, our goal is to provide the skills, resources, ideas and experience to accelerate growth to the next level of scale and sophistication — maximizing value creation for all. Tusk Partners is a leading M&A advisory firm focused exclusively on the dental space. A premiere healthcare focused growth equity firm. We believe the industry’s transformation will be led by lower middle market growth companies. Crystal Ridge Partners, based in Maplewood, New Jersey, provides capital to lower middle-market companies in the eastern half of the United States. Inpatient approaches are not only more expensive but also suffer from enormously high failure rates, such that insurers must pay out for no sustainable patient benefit. We are operationally-focused, research-driven, and technology-enabled. What are the core factors driving investor and buyer appetite for dental consolidation? Investors soon came to realize that dentist offices were adhering to a common, and very attractive, pattern: high loan-to-value (LTV) ratios and extremely low default rates. Today, interest in the space continues to rise. Lower middle market refers to the lower end of the economy’s middle market segment, which is measured in terms of the firms’ annual revenue Annual Income Annual income is the total value of income earned during a fiscal year. CCP’s founders, Mitchell Blutt, MD, Benjamin Edmands, Stephen McKenna, and Nancy-Ann DeParle, partnered together for over a decade while at JPMorgan Partners and its successor and predecessor entities (collectively “JPMP”), and have over 90 years of combined experience in private equity investing, primarily within healthcare. MoonSail Capital is a private equity firm with offices in Los Angeles and San Juan. Part of the attraction of these MAT approaches is the contrast in their approach with legacy inpatient approaches, which focused on abstinence-based techniques. Within this category are OTPs (opioid treatment programs), which increasingly are moving away from inpatient care to a lower-cost care model wherein the patient receives daily doses of medicine administered at an office. Mangrove Equity Partners, LP is a Tampa, Florida-based lower middle-market private equity firm. “We’re not really touched by PDGM-related issues. “The only meaningfully large player that could influence reimbursement in the autism category is maybe Tricare,” says Keith Jones, CEO of Blue Sprig Pediatrics, a leader in the autism services category. And given the risk of default is so low, it’s not a bad bet from any PE firm if they find a multiple they can live with.”. In 2008, private equity observed that consumer spending on dentistry — out of pocket, insurance or otherwise — was flat, while much of the rest of the industry was down. We partner with company founders and management teams to help drive growth and achieve true business potential. This is the first report in an ongoing series, and we’d love to hear your feedback. The market for resource-intensive residential substance abuse programs has settled a bit, and is expected to take another quarter or two before it re-corrects as consolidators try to digest and stabilize what they’ve acquired over the last few years. In other industries such as home health, more risk-tolerant expert investors will be able to take advantage of PDGM-induced activity at the right time — beating other investors to yield favorably low valuations, while entering markets after they’ve ascertained how the regulatory issues will impact respective business models. Investment Criteria; Portfolio; Team; News; Contact; 21 Years. East Los Capital is a lower middle market private equity firm making the world more productive through technology. Industrial, Consumer and Business Services companies. Lower Middle Market Private Equity White Paper | Page 2 Over the past several decades, private equity has become as much of a mainstream investment for certain investors as the term “alternative investments” will allow it to be. “Mental and behavioral health rationalizing in overheated and crowded areas; continued growth in autism diagnoses point to more sustained category growth”. The aging American population is the industry’s primary growth driver. One of the primary drivers of these economics is the low default rate. For some sectors, such as dental services and healthcare practitioners, the more healthcare-savvy investors will be able to present sellers with slightly higher valuations and multiples that win them deals while confidently leaving enough runway for growth. `. National health spending in America is projected to grow at an average rate of 5.5 percent per year for the next 10 years, reaching nearly $6.0 trillion by 2027, according to the Centers for Medicare & Medicaid Services. In the lower middle-market… Industry Experience. Operating Expertise. National health spending in America is projected to grow at an average rate of 5.5 percent per year for the next 10 years, reaching nearly $6.0 trillion by 2027, according to the, The aging American population is the industry’s primary growth driver. FiSol is currently seeing cases in which $1-2M EBITDA dental businesses are receiving valuations at a 4-8X EBITDA multiple, $2-$5M EBITDA businesses at 8-10X, and businesses in the $5-$10M EBITDA range receiving multiples in the 10-12x range from motivated buyers and investors. “We are getting more of our fair share” of inbound interest from sellers, says Vertess’ Brad Smith. At this rate, RSM projects that middle market funds will raise approximately $18.6 billion in 2020 compared to $30.6 billion from the previous year. Risk factors for the sub-sector are minimal. EXPERTISE. Caymus Equity | Private Equity for the Lower-Middle Market. People are our bottom line. We pursue a low-leverage strategy of investing in buyouts of UK small and medium sized companies across a range of sectors. PE firms thus have additional upside to equity by adding substantial leverage in DSO rollups. Partnering with Business Owners & Execs. Its flagship private equity fund is the $2.1 billion Abry Partners IX, with a $525 million Abry Heritage Partners fund focused on lower middle-market companies, a $1.05 billion structured equity investment fund and a $1.5 billion senior debt securities fund. No one seems to disagree about PDGM’s ultimate impact on the category. Read More >>, Enclara Health, in Partnership with Consonance Capital Partners, Purchases excelleRx / Hospice Pharmacia and PBM Plus Rockwood takes a values-based approach to investing. “PDGM [Patient Driven Groupings Model] is going to be big,” says Managing Director Bradley Smith of Vertess, a Texas-based healthcare focused M&A advisory firm. Value added support promotes sustainable growth. The Latticework team has significant experience investing in the healthcare industry having invested over $1.5 billion of equity across the healthcare ecosystem. Summit Park is a Charlotte-based private investment firm focused exclusively on the lower middle market. “The only meaningfully large player that could influence reimbursement in the autism category is maybe Tricare,” says Keith Jones, CEO of, When it comes to healthcare in 2020, the trends of. So we are in a bit of a holding pattern on those deals until after Q1 2020 due to that uncertainty.”, “Right now, it’s hard enough for a PE firm to get a handle on the [healthcare] industry in general, but then to figure out how PDGM might impact a target is very difficult,” notes Mertz’s Q3 Home Health report. Autism diagnoses have more than doubled in the last 10 years, from one in 125 children being diagnosed in 2008 to one in 59 in 2018, according to the, Risk factors for the sub-sector are minimal. In 2017, 63 percent of institutional investors said they are focusing on the U.S. small market buyout sector defined as funds with less that $500 million. “Operators will realize they can’t make money doing the same thing over the last 10 years. You get the right management team in place, and there’s a clear path to very healthy levels of EBITDA. Doug Rozsa, CEO of dental, veterinary, and optometry M&A advisory firm FiSol DVO, suggests that it all comes down to really good potential for multiple expansion driving excellent returns. Autism Care Likely to Enjoy Regulatory and Political Steadiness. Based in Chicago, IL, Patient Equity Partners is a lower middle market private equity firm that acquires healthcare, professional service, and insurance companies. We are an established team of professionals. “Home care will certainly come out of this PDGM issue with fewer operators in the market,” notes Cory Mertz, co-founder of Mertz Taggart, a healthcare M&A advisory firm focused on home and behavioral health. Who We Are Founded in 2001 and with offices in Atlanta and New … Approach Sector Focus Criteria Team Portfolio News Contact. Standard Private Equity Dictionary "Acquisition strategy" | Current products have no market. Read More >>, Consonance Capital Partners announces Nancy-Ann DeParle to join as Partner Mangrove has 100+ years collective reputation as effective, fair, flexible, and honorable partners to company owners and managers. And as for the 2020 presidential election, it would likely be a political minefield to go after the Autism Cares Act.” The Autism Cares Act is the primary source of federal funding for autism research, services, training, and monitoring. The firm, with offices in Boston and Menlo Park, Calif., targets companies within healthcare and several other industries. People are our bottom line. Mission Statement When it comes to healthcare in 2020, the trends of capital superabundance and the prevailing winds of regulatory change will continue to favor the specialists and subject matter experts who are best able to underwrite and price risk in the changing healthcare economy. Axial's 2019 Lower Middle Market Healthcare Heatmap: The top 25 most active lower middle market healthcare investors & corporate acquirers; the top 25 lower middle market healthcare investment bankers & advisors; The 10 most in-demand healthcare categories; Insights on Home Health, Dentistry, and Behavioral healthcare. Sentinel targets lower middle market private equity investments in the aerospace, defense, business services, consumer, distribution, food, restaurants, franchising, healthcare, and industrial manufacturing industries. Based in New York, the firm seeks to investment between $20 million and $50 million in healthcare companies providing services and products and distribution. As people age in affluent countries like the US, they need greater quantities and greater complexity of healthcare services – both of which drive growth in healthcare spend and healthcare labor requirements. We buy and grow smaller, niche businesses that often fall outside the parameters of the typical professional investor due to a variety of factors such as size, owner transition, or a need for "hands-on" management. And that puts acquisition activity and the market as a whole on steroids,” says Vertess’ Smith. Default rates below one percent are typically very attractive to capital providers, and the .50 percent default rate for dentist offices are an even greater standout. T he Tax Cuts and Jobs Act of 2017 has impacted virtually every business taxpayer, including private equity firms and their portfolio companies. 50 top lower middle market executives and deal professionals in healthcare (see full list below). Read More >>, Consonance Capital Partners Signs Definitive Agreement to Sell Enclara Healthcare to Humana The firm was founded on the belief that special lower middle market companies deserve large firm capabilities, experience and resources with a small firm focus and style. Interest in the lower middle market has grown substantially, according to Probitas Partners’ Private Equity Institutional Investors Trends for 2017 Survey. Target Acquisitions Alpine Pacific focuses on the acquisition of lower middle market companies – broadly defined as companies with revenue between $10 million and $100 million – with attractive EBITDA margins. Skyline Global Partners LLC is a lower middle market private equity firm based in Chicago, Illinois. Please provide valid email address. Mangrove Equity Partners, LP is a Tampa, Florida-based lower middle-market private equity firm. According to projections from the U.S. Census Bureau, the number of people over 65 will grow from 43 million in 2012 to 84 million by 2050, rising from 14 percent of the population to 21 percent, reports AMN Healthcare. Shore Capital Partners is a healthcare-focused lower middle market private equity firm that specializes in partnering with companies that have between $5 and $50 million of revenue. Sign In With both patient recidivism rates and private equity-led activity in behavioral health at all-time highs during the mid-2010s, payers became more sophisticated and reduced reimbursement. To add more perspective, the US PE middle market made up 70% of money invested by private equity in 1H, though that total should come down by the end of the year, thanks to a handful of mega-deals that have yet to close. Advisors are expecting a disproportionate share of M&A activity to take place in industries less impacted by regulations, such as dentistry, while uncertainty about the regulatory environment and its financial implications in other sectors such as home and behavioral health is expected to decelerate both investor and seller activity until mid-2020. DSOF will seek to build on Corbel’s experience in the lower middle market to drive value by providing liquidity capital to “rescue” high-quality businesses with short-term stress and long-term attributes for success. Lower Middle Market Private Equity White Paper | Page 4 According to the RCP database, our current LMM GP data set is made up of approximately 550 unique, active GPs who manage private equity funds with less than $1 billion in capital. . Approach Sector Focus Criteria Team Portfolio News Contact. Nonantum Capital Partners is a private equity firm led by a group of experienced private equity and management executives, formed in 2018 as a spin-out from Charlesbank Capital Partners. We seek to work collaboratively every … They were getting 2-3x and gladly accepting it, because it was substantially more than what another doctor would pay. East Los Capital is a lower middle market private equity firm making the world more productive through technology. 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