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Exclusive: TPG buys Nextech from THL for $1.4B

Aaron Weitzman
Illustration of two people shaking hands on a giant stack of money.

Illustration: Aïda Amer/Axios

TPG bought physician practice software provider Nextech from Thomas H. Lee Partners for $1.4 billion, TPG partner Katherine Wood tells Axios exclusively.

Why it matters: The deal indicates a credit market rebound and some hope for a more active second half of 2023.

Details: Nextech generates about $57 million of EBITDA, Axios reported last month, implying a valuation multiple of roughly 20x.

  • The business generates around $175 million in revenue, and sources tell Axios that Nextech has seen more than 20% growth in both revenue and EBITDA in recent years.
  • Wood declined to comment on terms or financials. The transaction is expected to close in the third quarter of 2023.

What they're saying: "Health care and tech are our most active areas, and that intersection has been a key focus area for us," Wood says.

  • TPG will draw on its experience growing investments such as specialty electronic medical records provider WellSky, which has reinforced the sponsor's knowledge of the space, she adds.
  • "Inorganically, we see a similar opportunity to the one we had with WellSky, to add other legs of the stool," Wood notes.
  • Under TPG, Nextech could add new specialties via M&A, she says.

How it works: Based in Tampa and founded in 1997, Nextech offers all-in-one, ONC-certified EMR practice management, revenue management and patient engagement software and services.

  • Nextech services more than 11,000 physicians and over 60,000 office staff members, spanning dermatology, ophthalmology, orthopedic, plastic surgery and medical spa practices.

Catch up quick: We reported and confirmed THL was taking second-round bids for the asset in late June.

Of note: William Blair was lead sell-side financial adviser to THL, with Raymond James and Jamieson as co-advisers. Kirkland & Ellis served as legal counsel to Nextech and THL.

  • Triple Tree, Guggenheim, and UBS served as financial advisers to TPG, with Ropes & Gray offering legal counsel.

What we're watching: Amid a dearth of sponsor-to-sponsor platform trades this year, this deal could open the floodgates.

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