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Scoop: Novo clinches deal for Pritzker's KabaFusion

Sep 22, 2022
Illustration of a key ring hanging on an IV pole.

Illustration: Shoshana Gordon/Axios

Novo Holdings has agreed to acquire Pritzker Private Capital's KabaFusion, a home infusion company specializing in intravenous immunoglobulin (IVIG), sources tell Axios.

Why it matters: The home infusion market is highly fragmented, presenting an opportunity to create another large, diversified platform consolidator more akin to the big two: OptumRx and Option Care Health. Freshly-backed KabaFusion could be that starting point.

Details: The deal's exact price tag couldn't be confirmed, but a $1 billion-plus valuation is implied.

  • Sources previously cited marketed 2022 EBITDA of $57 million, or close to $75 million in pro forma 2022 EBITDA, and two sources say the deal commanded a multiple around the 19x-20x vicinity.
  • Houlihan Lokey advised the company, sources say.

Catch up quick: KabaFusion, licensed to serve patients in 44 states, earlier this month nearly doubled its specialty pharmacy footprint across 25 states via the acquisition of assets from Coram.

Flashback: Pritzker bought KabaFusion in 2019 in a deal valued at approximately $250 million, a mid-teens multiple, sources told Axios previously.

  • It followed with the 2020 purchase of Lincare's line of infusion pharmacies, adding about $100 million to the top line, they said.

Context: Novo, with roots in Denmark, is quickly making a name for itself in U.S. health care and life sciences investing through its Principal Investments arm — KabaFusion would be its third such mark of the year.

  • The Principal Investments team put feet on the ground in Boston in 2021, with those efforts led by former Temasek health care investor Abhijeet Lele, who joined in late 2020 alongside ex-CVC Capital investor Jonathan Levy.
  • KabaFusion would follow the acquisitions of Ritedose and Medical Knowledge Group in January 2022; and Altasciences and Availity in March and July 2021, respectively.

State of play: The IVIG market is growing, and other PE-backed infusion therapy providers offer this therapy including H.I.G. Capital's Soleo Health, Linden Capital's Vital Care, and Waud Capital Partners' PromptCare.

💭 Our thought bubble: The issue of drug concentration is top of mind for investors who spoke with Axios, which is why we suspect Novo is not only a believer in IVIG's underlying trends but has a bigger, broader vision around home infusion.

Novo declined to comment, while Pritzker and Houlihan did not return requests for comment.

Claire Rychlewski contributed reporting.

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