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BFD Expert Voices - Health Tech Deals

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Goldman Sachs and Deutsche Bank are engaged by Dallas-based Signify Health for financial advice on its strategic alternatives process, sources tell Sarah. 

Driving the news: About 18 months after New Mountain Capital took the health tech company public, the Wall Street Journal wrote on Tuesday that Signify was "working with bankers" to explore options including a sale.

Signify, a technology-driven value-based care enabler, could draw interest from both private equity and managed care providers, the report said. 

Catch up fast: Signify raised $564 million in its February 2021 IPO. 

Almost a year to the date after its public market debut, Signify struck a $250 million deal to buy Caravan Health, which brings together accountable care organizations in an effort to take risks and curb Medicare spending.

Last month, Signify unveiled plans to wind down its Episodes division and leave a bundled payment program, saying it planned to focus on its profitable and growing home and community services division, plus Caravan. 

By the numbers: Signify shares popped on the news, pushing its market cap to about $4.5 billion, but are down slightly today.

That's down from a market capitalization of $7.12 billion when it debuted on the public markets last year. 

Shares are up on the year, but prior to the report, had lost 25%-plus since its IPO.

Signify and Goldman declined to comment, while a DB representative did not return a request for comment. 

1 big thing: Here's who's advising Signify Health

Illustration of a stethoscope with a high price tag

Public Partnerships, an enabler of self-directed in-home care, quietly garnered an investment from DW Healthcare Partners and Linden Capital Partners, Sarah has learned. 

Behind the scenes: Few details are known about the transaction, which has yet to be announced, but on Linden's end, sources say the investment was made through its structured capital vehicle.  

Catch up fast: The joint investment follows a Covington Associates-run sale process that kicked off several months ago, targeting private equity, Axios wrote previously.

Per the April report, PPL marketed close to $30 million of EBITDA, but one source cited actual EBITDA of closer to $20 million.

Yes, and: Linden operating partner and veteran health care executive Miki Kapoor announced earlier this week on LinkedIn that he had joined the PPL board as a director. 

How it works: PPL, a subsidiary of Boston management consulting firm Public Consulting Group, acts as the technology backbone for self-directed in-home care.

It facilitates and manages the various back-end functions to compensate caregivers of patients with disabilities or chronic illnesses that are eligible for public Medicaid assistance. (It doesn't actually employ caregivers or provide care.)

The company says that it is the largest fiscal intermediary for self-directed home care services, providing more than 50 programs in 21 states.

Between the lines: Caregiving is often provided by family members or friends, and that can lead to financial or emotional stress  — particularly if those caregivers are forced to step away from paid jobs. Programs like those offered by PPL enter as a solution. 

Self-directed in-home care is an alternative to the typical home care agency model, through which an individual is matched with a third-party caregiver. In contrast, the former lets individuals choose who provides care for them. 

It also reduces the likelihood of expensive, long-term institutional care.

What they said: The benefits of this program are twofold for those states that like the model: "The states like the program because, one, there's a need for it, and two, there's a job creation opportunity," one source told Sarah in April. 

Of note: DW Healthcare and Linden are old friends.

The pair of firms jointly invested into HydraFacial in December 2016 and took the beauty-health company public in late 2020 through a $1.1 billion SPAC deal. 

In 2012, DW Healthcare bought Z-Medica, selling majority control of the hemostatic products company to Linden in 2017. The pair ultimately exited their investments in full through the 2020 sale to Teleflex.

DW Healthcare and Linden declined to comment, while PPL's parent company could not immediately be reached.

2. The BFD: Public Partnerships gets funding 

Illustration of a doormat with a red cross outside a front door.

Salvo Health, a New York-based digital gut health startup, raised $10.5m in seed funding. Threshold Ventures led, and was joined by Torch Capital and Felicis Ventures. www.salvohealth.com

Atropos Health, a Palo Alto-based physician consultation service, raised $14m in Series A funding, Breyer Capital led, and was joined by Emerson Collective and Boston Millennia Partners. www.atroposhealth.com

Blue Water Acquisition II, a health care SPAC led by the founder of Blue Water Vaccines, withdrew registration for a $75m IPO. https://axios.link/3PVB9Lz 

Burjeel Holdings, a United Arab Emirates-based health care provider, is seeking to raise at least $750 million in an IPO in Abu Dhabi this year, per Bloomberg. 

3. Deals 'o the day

Brightline named former Omada Health senior director of clinical product Jennifer LaGuardia VP of care innovation. 

Nava Benefits named former HyperScience director of financial planning Kristen Malone VP of finance

Micro Merchant Systems named TA Associates managing director Mark Carter a board member. 

4. It's Personnel 

👋 Hi, it's Sarah. Erin is traveling to my home away from home to explore the Tetons through next Tuesday. I'll be in the concrete jungle. As always, write to me with any tips, deal news or feedback!   

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August 05, 2022

1 big thing: Here's who's advising Signify Health