Isabel O'Brien

Happy Tuesday – we hope everyone had a restful holiday weekend! It’s Isabel O’Brien here with Value Add, a free weekly newsletter from Privitas covering the latest private equity operations news. Here’s what you need to know this week.


Done Deal

Full access. New Mountain Capital agreed to buy Access Healthcare, a Dallas, Texas-based revenue cycle management company for the healthcare sector, at a valuation of $2 billion. According to a press release, the funds will be used to “[advance] its capabilities in artificial intelligence, workflow automation, product development, and expanding into new markets.”

Uphill battle. This isn’t New Mountain’s first foray into the RCM sector. Last August the manager lost a bid to take its portfolio company, R1 RCM, private after having a falling out with co-owner Towerbrook Capital, which was ultimately victorious in acquiring full control of the asset.

New Mountain’s tenure at R1 RCM was a tough one. The company’s stock price plummeted in 2022 after the firm was accused of securities fraud and reported lower-than-expected profits. The following years saw multiple scandals continue to rock the company, from a $45 million fine for breach of fiduciary duty to a massive data breach to accusations of revenue manipulation. 

Do-over? Perhaps New Mountain is looking to do things differently with Access Healthcare. After all, the revenue cycle management space is still red-hot, with relatively low penetration making scale more feasible. 

New Mountain Capital did not provide comment upon request. 


Portco News

PE portcos also saw some full and partial exits last week, as well as some exits-to-be:

 * Hg solidified its plans to sell Trackunit to Goldman Sachs’ private equity arm at a valuation over $1 billion, with Hg considering retaining a minority stake. GS initially sold the firm to Hg in 2021 after acquiring it alongside GRO Capital in 2015. Trackunit is a Danish provider of connective software and telematics for the construction industry.
 * News broke that TDR Capital is looking to IPO EG Group, a British firm that operates a line of gas stations. Despite its UK roots, the firm will IPO in the US under the name Cumberland Farms, a chain of convenience stores the company bought in 2019, seeking a valuation of $13 billion.

Meanwhile, portco M&A was in full swing:

 * Bain Capital’s plans to sell the television audience ratings unit of its portico Kantar Group were made public. The buyer, HIG Capital, is said to be ready to spend $1 billion, though Bain was hoping for $1.2 billion. 
 * Data quality and analytics platform Qlik bought Upsolver, a technology-building platform intended for software developers, for an undisclosed amount. Qlik is owned by Thoma Bravo. 
 * Thoma Bravo’s Flexera acquired The Spot from NetApp. The Spot is a financial operations software that will complement Flexera’s core service of IT asset management SaaS. Financial terms were not disclosed.
 * insightsoftware, a company owned by Hg and TA Associates that focuses on CFO-level software solutions,  bought JustPerform, an enterprise performance management platform, for an unknown amount. 
 * Online ticket broker Dice sold its live music events series, Boiler Room, to Superstruct, a music festival operator owned by KKR and CVC, for an undisclosed amount. 
 * Capitol Imaging, a radiology group owned by Clearview Capital, aquired seven regional outpatient centers along the coast of the Gulf of Mexico, making 48 total centers under the firm’s ownership, up from just 20 five years ago. The deal, done with DRH & Associates, was for an undisclosed amount. 

And there were some key people moves:

 * Sparkling beverage manufacturer Spindrift, freshly acquired by Gryphon Investors at a reported valuation of $650 million, brought on a new CEO, Dave Burwick, who most recently served as the head of Boston Beer. Burwick replaces founder and current CEO Bill Creelman, who will stay on at the company as its chairman of the board.
 * KKR appointed Sir Jeremy Darroch to serve as an executive advisor to the firm’s European telecoms business. Darroch previously served as the CEO and executive chairman of Sky for 15 years.
 * Manulife Investment Management hired Ryan Hanna, former co-head of the global client group at GCM Grosvenor, to serve as the global COO for private markets.
 * Bain-backed ExtraHop, a cloud-focused cybersecurity firm, brought on Rob Greer as its next CEO. Greer joins from Broadcom where he served as general manager of the firm’s enterprise security division. Current chief executive Greg Clark will transition to a new role as the executive chair of the board at ExtraHop.


Hot Take

End of an era. Roll-ups can be nuanced, intricate strategies with real benefits for portfolio companies when designed correctly. Sadly, what we’ve seen is that more often than not, add-on acquisitions act as a lazy maneuver on sponsors’ ends to grab more market share.

I don’t doubt that the motivation behind this is not sinister in nature — I think PE firms genuinely have a desire to enact quick portco expansion without getting into the weeds of organic growth. However, this structural need for speed embedded into the closed-fund system has put the US consumer at an inherent disadvantage — quick portfolio company growth has come at the sake of fair competition.

PE firms don’t go to market with monopolies in mind. They do, however, always go to market with a strategy that prioritizes market dominance and optimized profits. The fact that the Federal Trade Commission has come knocking should come as a surprise to no one.

Bipartisan backlash. Given that a right-leaning Texas judge dismissed the case in May, it’s easy to try and blame the FTC’s actions on an overzealous, left-leaning administration headed by the “anti-business” Lina Khan. No matter what your feelings are on her, the reality of the situation is that as America takes a populist swing, the new Republican administration is poised to take a critical view of private equity roll-ups, too — especially those that result in raised prices or curb free speech.

“That Welsh Carson is a private equity firm is irrelevant; the antitrust analysis would be the same if Welsh Carson were, for example, an individual or institutional investor… Welsh Carson made acquisitions. As alleged in the complaint, those acquisitions demonstrably created monopoly power and Welsh Carson wielded that power to raise prices. That is exactly what Section 7 prohibits anyone from doing,” Andrew Ferguson, Khan’s Trump-appointed replacement, wrote of the WCA&S ordeal.

Scott-free. Given the evidence that Texans overpaid for healthcare services by tens of millions of dollars due to the portco’s raised prices, WCA&S got off relatively easy. The firm won’t have to pay any monetary penalties — rather, it just has to agree to freeze its investment at USAP at current levels and reduce its board representation at the firm to a single, non chair seat. WCA&S will also need to obtain approval from the FTC if it wishes to make investments in anesthesiology in the future. 

With scrutiny of private equity ownership of healthcare assets at an all-time high, the next target of the FTC might not be so lucky. To protect themselves against the federal government’s wrath, perhaps it’d do PE firms some good to take the high road. M&A can offer quick market share, but it comes at the cost of competition. Organic growth is more risky and better for American consumers in the long run. 


More from Privitas

 * Small Exits Outperformed Large Ones in 2024 (Read)
 * Portco CFOs Key to Successful Roll-Up Strategies (Read)
 * Technology: Value Creation 2024 (Read)
 * M&A Is Risky, But Operating Partners Choose It Anyways (Read)
 * Could Unhappy Employees Be Good For Tech Exits? (Read)

That’s all for this week – thanks for reading. Have questions? Email isabel.obrien@privitas.com

Daily Insights

Was New Mountain’s $2B Access Healthcare Deal Worth the Wait?

Cooper Smith

Key Findings

Sponsor-to-Sponsor Exits Continue to Dominate: Sponsor-to-sponsor (S2S) exits represented 68 percent of all PE-backed exits with an enterprise value equal to or greater than $1 billion in 2024, tripling in volume over the past two years.

Technology Leads Exit Activity: Technology companies comprised 31 percent of PE-backed exits of companies with enterprise values over $1 billion in 2024, making it the dominant sector, followed by industrials (16 percent) and healthcare (13 percent).

Market Expansion as the Top Value Creation Driver: Market expansion strategies were responsible for 51 percent of exits exceeding $1 billion in 2024, outpacing M&A (15 percent) and performance improvement (12 percent).

North America Remains the Hub for Mega Exits: The US accounted for over 50 percent of PE-backed exits of companies with enterprise values over $1 billion in 2024, cementing its position as the epicenter of private equity activity.

Read Full Report


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Intelligence Report

Mega Fund Exit Trends 2025

Happy Monday! It’s Isabel O’Brien here with Value Add, a free weekly newsletter from Privitas covering the latest private equity operations news. Here’s what you need to know this week.


Done Deal

Kantar’s carve-out. HIG Capital announced its intentions to carve out Kantar Media, a media measurement and analytics platform, from its parent company Kantar Group, a global provider of marketing data and analytics.

Kantar Media’s purchase price has been set at $1 billion, to be paid primarily in cash, with additional non-cash considerations including separation-related investments from HIG Capital as well as a potential earn-out.

Around the world. HIG’s previous forays into the European media space tended to hinge on international expansion for their value-creation strategies. 

Take, for example, Brand Addition, a London-based marketing firm that HIG carved out from 4imprint in 2011 at an enterprise valuation of £24 million ($30 million) and sold in 2017 to Elysian Capital for under £50 million. Brand Addition was able to achieve this growth by opening new offices in Turkey, Russia, and China, as well as acquiring the US-based Gateway CDI. 

Similarly, The Engine Group, a global media consultancy acquired by HIG in 2010 for £62.5 million and sold to Lake Capital in 2014 for just over £100 million, also used HIG’s capital injection to fund international expansion, namely into the US and China. 

Kan’t stop. Kantar Media, however, already has a broad global presence, operating in over 60 markets with a swath of offices across the US, Europe, and Latin America, as well as offices in South Africa and southeast Asia. 

There are some noticeable gaps. Kantar Media sold its North American advertising intelligence unit (dubbed Vivvex) in 2023, meaning HIG could build that business arm back out. Additionally, Kantar Media doesn’t have offices in China, the world’s second-largest advertising market with double-digit growth projected through 2030. 

As such, Kantar Media noted international expansion plans in the press release announcing the acquisition by HIG. “This transaction would give us the resources and support to further accelerate our growth trajectory and strengthen our position as the global leader in media measurement and analytics,” stated the firm’s CEO Patrick Béhar.

Chris Jansen, the CEO of the seller, Kantar Group, corroborated this, stating: “We set up Kantar Media to be operationally independent in 2023, to allow it to consolidate its global leadership position in audience measurement. Today's proposed partnership announcement with H.I.G. Capital positions Kantar Media to continue its investments in technological and geographical leadership.”

HIG Capital did not respond to request for comment.


Portco News

PE portcos also saw some full and partial exits last week, as well as some exits-to-be:

 * PS Alliance and Pearl Investment sold their collective 49 percent stake in Star Vision, a Korean manufacturer of colored contact lenses, to CVC. The deal values the company at ₩600 billion ($420 million). 
 * KKR-backed healthcare provider BrightSpring sold its behavioral health business to Sevita, a provider of home-based specialty care, for $835 million. 

Meanwhile, portco M&A was in full swing:

 * Caseware, a cloud-enabled auditor backed by Hg Capital, acquired Extractly.ai, an AI-based data processing solutions provider, for an unknown sum. This is Caseware’s ninth acquisition since Hg bought a majority stake in the firm in 2020.
 * Clearlake Capital’s PrimeSource Brands, a provider of specialized building products, bought KeyLink, an aluminum rail systems manufacturer, for an undisclosed amount. This is the firm’s eighth acquisition since Clearlake bought a majority stake in the firm in 2020.
 * Bluematrix, a financial services research publisher owned by Thoma Bravo, announced the acquisition of Street Context, an email intelligence and analytics platform, for an unknown sum.
 * Canadian insurance broker Navacord Corp, backed by Madison Dearborn, announced plans to merge with Citistar Financial, a life insurance managing general agent. The unified brand will be called Waypoint and will manage over $1 billion in assets.
 * Apax-backed Fibonacci Group, a consumer finance SaaS provider, bought consumer credit software platform Quid Group from Equinox Investments for an unknown sum. The deal doubles Fibonacci’s size to over 1,500 employees and €210 million ($220 million) in revenues.
 * Fresche Solutions, a software company backed by APG, acquired OmniData Insights, an AI-enabled data analytics platform, for an undisclosed amount.
 * Thoma Bravo announced plans to acquire and merge OPEXUS and Casepoint to create a data management platform for the public sector. Financial terms are unknown; what is known is that existing shareholders in both companies will retain minority ownership stakes. 
 * Aptean, an enterprise software company backed by TA Associates, Insight Partners, Charlesbank Capital Partners, and Clearlake Capital, entered into a definitive agreement to take Logility, a provider of supply chain management software, private. The firm will pay $14.30 per share in cash, a 28.4 percent premium to the 30-day volume-weighted average share price as of 23 January, implying a total valuation of about $480 million.

And there were some key people moves:

 * Bain Capital’s customer service specialist VXI Global Solutions appointed Ryan Collins as Chief Operating Officer. Collins previously served as the COO of Conduent, a government payments contractor.
 * Azalea Investment Management, the private equity firm owned by Singaporean state investment firm Temasek, announced that its CEO Margaret Lui will step down from her role at the end of Q1 and be superceded by current CIO Chue En Yaw.
 * Quest Software, backed by Clearlake Capital since 2022, hired Tim Page as its next chief executive, replacing Patrick Nichols, who held the role from 2020 to September of last year and still serves as a board advisor. Page’s most recent position was that of acting CEO at CloudSoda. 
 * PharmaCord, a patient services company for the pharmaceuticals industry owned by Permira, appointed Robert Truckenmiller as CEO. Prior to PharmaCord, Truckenmiller served as the head of US vaccines at global biopharma company GSK. He replaces Nitin Shaney, PharmaCord’s founder and CEO who will continue to sit on the firm’s board.


Hot Take

All about popular. Few industries are as unpopular in America right now as the healthcare industry – according to a Gallup poll from August 2024, 51 percent of Americans have a negative view of the healthcare sector, while 61 percent had a negative opinion of the pharmaceutical sector. 

Add to that the fact that 56 percent of Americans (as of 2022) believe that banks and financial institutions have a negative impact on the country, and we have a recipe for disaster brewing for a major portion of PE portfolio companies.

Taking the pulse. Managers who think the heat might be dialed down with a friendlier administration in place need a reality check. Sure, Trump had a litany of business leaders behind him (quite literally) at his inauguration, amongst them hedge fund founders and financiers alike. But he has openly embraced an anti-establishment health agenda spearheaded by Robert F. Kennedy Jr. that emphasizes the culpability of business interests in denigrating Americans’ health.

Furthermore, there’s no guarantee that the FTC will veer off its current anti-PE path. In fact, the outgoing director of the FTC’s Bureau of Competition, Henry Liu, claimed that anti-merger enforcement has strong bipartisan support which will continue into the incoming administration. He’s not alone in this line of thinking – last week, we covered how Trump’s incoming FTC chair shared similar views to Biden’s Lina Khan when it came to the alleged anticompetitive behavior exhibited by WCA&S in a recent settlement. 

Not to mention, a large amount of the legal threats to PE-backed healthcare and pharma will come from the states. From blue states (New York, Connecticut, Massachusetts) to red states (Indiana), legislation limiting PE-backed healthcare is proliferating. 

All of this is to say: investors might want to get more creative with their value creation strategies in the space – roll ups likely won’t be a viable option in the near future.


More from Privitas

 * Mega Fund Exit Trends 2025 (Read)
 * Small Exits Outperformed Large Ones in 2024 (Read)
 * Portco CFOs Key to Successful Roll-Up Strategies (Read)
 * Technology: Value Creation 2024 (Read)
 * M&A Is Risky, But Operating Partners Choose It Anyways (Read)

That’s all for this week – thanks for reading. Have questions? Email isabel.obrien@privitas.com

Business Services

Will HIG’s Old Playbook Work with $1B Kantar Media Carve-Out?

What's Included

 * Record Surge in Sponsor-to-Sponsor Exits: Discover why sponsor-to-sponsor (S2S) exits have skyrocketed by 154% in 2024, now representing 68% of total exits for PE-backed companies – more than double last year’s rate.
 * Shorter Holding Periods, Faster Turnarounds: Learn why companies exiting through S2S deals have a shorter holding period than those going public or acquired by strategics, and how it impacts exit strategies.
 * Underperforming Assets in the Spotlight: Uncover why lower-growth companies are more likely to follow S2S exits, with enterprise value (EV) expansion lower than their IPO or strategic exit counterparts.




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Published Research

Sponsor-to-Sponsor Exits 2024

What’s Included

 * Extended Strategic Planning Horizons: Explore how PE firms are adjusting to longer holding periods by extending strategic planning to 5-7 years, enabling deeper value creation and robust risk management strategies that align with market cycles.
 * Focus on Organic Growth and Cash Flow: Understand the increased emphasis on organic growth and strong cash flow generation in the current economic environment, and the operational efficiency measures that PE firms are adopting to support these goals.
 * Demand for Digital Transformation Leadership: Discover the growing need for executives who can drive digital initiatives, with an emphasis on talent acquisition, cultural transformation, and investment in cutting-edge technology across portfolio companies.
 * Integration of ESG in Investment Strategies: Learn how PE operators are incorporating Environmental, Social, and Governance (ESG) factors into their strategies to meet investor expectations, mitigate risks, and drive sustainable value creation.

Key Findings

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