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PE HUB Healthcare Wire Highlights, 9.20.18

PE investors get emotional for pets

Good morning!

Is it too early to talk about JPM?

I mean, the JP Morgan conference — healthcare’s biggest investor event, in San Francisco each January. People are already talking about it, which reminded me I better book my accommodations ASAP before I end up in the same questionable establishment as earlier this year.

One saga I’m hoping comes to an end by then is AthenaHealth, which the latest reports suggest has pushed out its bid deadline. As one source recently put it: Athena is setting the mark for a lot of healthcare IT companies. Folks want to see how the price shakes out. Then more M&A ought to follow.

In other news, OMERS and Quad-C were behind a couple notable industry deals this week. But today I’m not talking about the market of human healthcare.

Investors are getting emotional for pets 

As many of you know, this summer produced some high-profile dealmaking involving major vet-hospital networks.

Oak Hill Capital recapped VetCor in a deal that was expected to command north of $1.5 billion, while Nordic Capital’s sale of AniCura valued the European chain at close to €2 billion ($2.36 billion) – plus it produced a 7x return for the seller.

In recent developments, I learned that sponsors have been sniffing around another player in the market for some time: Ethos Veterinary Care. The process has created significant noise around valuation, sources told me. Read my story for more detail.

It should come as no surprise that pet health is as hot as ever – for a number of reasons, including the lack of reimbursement risk.

But Ethos is unique because most sponsor activity we’ve seen to date has been around primary-care vet chains. Ethos hospitals focus entirely on specialty services, which range from treatments for the same neurological disorders that people face to reconstructive surgery and wound care.


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