Yesterday I was interviewed by a Boston radio station that’s doing a piece on the finances of drug rehab centers, like Bain Capital’s $723 million acquisition last year of CRC Health Group. I broadened the conversation a bit to discuss specialty healthcare facilities in general, since most of them have similar value propositions: Guaranteed reimbursement (albeit a bit different for drug rehab than for a cardiac care center), underlying real estate and equipment assets, a never-slowing supply of customers and (in many cases) an opportunity for physicians to own an equity stake in their employer.
In short, these are great deals if you can find them. And, not surprisingly, the sector is (baby) booming. Private equity investments in healthcare facility companies have risen each year since 2002, according to data I just pulled from Thomson Venture Economics. The were 21 such deals in 2002, and have risen consistently until hitting 69 in 2006.
There are only two listed so far for 2007, but that number is now three – following
this morning’s announcement that TA Associates has sponsored a $130 million minority leveraged recap of American Access Care LLC, a Glen Rock, Pa.-based operator of freestanding outpatient vascular access centers dedicated to patients suffering kidney failure. (Update: The TA deal actually closed last October, and was originally announced then. A new press release by one of its financial advisors came today).