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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Bain & Company is taking a minority stake in Kohlberg-backed life sciences commercialization firm Trinity Life Sciences as part of a new strategic partnership, the firm tells Sarah exclusively. 

Why it matters: The investment underscores demand in life sciences for outside resources to support innovation and strategic playbooks, while navigating a complex regulatory and deal environment.  

What they're saying: "It is really one of the most robust markets for advisory services," Tim van Biesen, head of Bain & Co.'s global health care practice, tells Sarah. "We can't put a Bain team in 60 countries, but we can but a Trinity-like resource [in each of those]."

Yes, and: The investment speaks to the urgency to find new ways to keep up with advancements in science from a commercialization perspective, adds Leslie Orne, Trinity president and chief commercial officer. 

"We on the commercialization side are trying to figure out how to get these great innovations in the hands of more people," Orne says. How drugs are priced, sold and marketed — "that's still a little bit antiquated."

Zoom in: This is both about meeting demand and gaining a competitive edge with a more robust set of offerings.

While Bain & Co. is focused on "large change transformation" for life sciences clients  — i.e. M&A and commercial or medical affairs transformation — Trinity will bring complementary (and largely doctorate-centric) technical expertise in biopharma and medtech, such as benchmarking intelligence, van Biesen says.

Trinity, with a hybrid model including project-based, recurring revenue and membership-based offerings, specializes in technology-enabled strategy, insights and analytics to support commercialization. 

Between the lines: With debt financing volatility and a sustained disconnect between seller and acquirer valuation expectations, van Biesen says many life sciences clients are hyper-focused on margin management and performance management. 

Clients are "making sure they don't get in over their skis," he says. 

But M&A screening activity and investment in growth remain high as folks wait for debt markets to normalize. 

"Their hope is it begins to create opportunity in areas that were getting a little pricy... There's no problem with balance sheets or a cash shortage on the buyer side." 

Catch up fast: Kohlberg & Co. in November won a competitive auction for Trinity, providing an exit for Parthenon Capital Partners in a deal commanding a total enterprise value of $1.4 billion, sources told Sarah at the time. Jefferies and SVB Securities advised the sellers on the deal. 

Around that time, Bain & Co. and Kohlberg started having conversations around a transaction.

In July, Trinity acquired Illinois-headquartered D Cube Analytics, inheriting new data science and digital transformation capabilities. Trinity continues to look for tuck-in acquisition opportunities, Orne notes. 

Trinity has grown to 12 global offices and 1,200 employees, up from about a 250-person workforce when Parthenon first invested in March 2018. 

State of play: Trinity is one of many commercialization-focused or medical communications life sciences advisory firms that raked in a PE investment at valuations into the 17x to 23x range, per Axios' previous reporting. That includes: 

Astorg's recent acquisition of Open Health from Amulet Capital, which valued the medical affairs company just shy of $1 billion, sources told Axios in June.

Novo Holdings’ January acquisition of Medical Knowledge Group at a $1.15b valuation.

TPG’s investment in BGB Group last summer at a $760m valuation.

Eversana, backed by Water Street Healthcare Partners and JLL Partners, acquiring InTouch Group in a deal valued at at least $950m.

GHO Capital’s investment in ClearView Healthcare Partners at a $700m-plus valuation.

Ares’ investment in The Lockwood Group at a mid-$300m valuation.

1 big thing: Kohlberg's Trinity gets another backer

Illustration of a gloved hand with tweezers holding a $100 bill.

United Parcel Service has agreed to acquire Bomi Group, an Italian-based distributor of medical products. 

Why it's the BFD: COVID-19 highlighted the importance of reliable and efficient medical product distribution. Bomi plays in a large and growing area of the market increasingly in focus: temperature-controlled transport. 

Pharmaceutical and biologic therapies rely on cold-chain systems that monitor temperature and extend shelf life during transport.  

Details: Via Bomi, UPS gains temperature-controlled facilities in 14 countries, inheriting a fleet of more than 350 temperature-controlled vehicles and 4 million square feet.

Bomi facilitates the delivery of pharmaceuticals and medtech supplies to hospitals, clinics, labs, pharmacies and patients in the home. 

The company employs 3,000 and serves over 150 multinational customers worldwide.  

Financial terms were not disclosed. J.P. Morgan Securities advised UPS. 

Context: UPS Healthcare has already doubled its global footprint since 2020 to meet heightened demand, a news release says. 

The division has newly constructed health care facilities in Germany and Australia, and expanded footprints in Hungary and the Netherlands. 

It recently bolstered its technology-driven tracking service UPS Premier to improve logistics quality. 

State of play:  Bomi was taken out by a global logistics strategic, but many private equity investors are also building out players in the business of temperature-controlled transport. 

In June, EQT and Mubadala bought Envirotainer — a global leader in active cold chain technologies for air transport of pharmaceuticals — in a $3 billion deal. 

CSafe Global, backed by Thomas H. Lee and Frazier Healthcare Partners, in December bought Softbox Systems, which produces passive temperature-controlled packaging systems. 

Global packaging company Sonoco also plays in the passive cold-chain logistics arena through its ThermoSafe unit.

Yes, and: Investors are putting their money behind health care's infrastructure in other ways, too. 

Medline, a distribution behemoth of low-complexity products to hospitals like scrubs or sterilized trays — last year commanded a $34 billion enterprise value with its leveraged buyout by Hellman & Friedman, Carlyle and Blackstone.

Bain Capital shortly after bought PartSource, which can be likened to an "Amazon of health care" from a B2B perspective, in a deal valued at $1.25 billion, sources told Sarah then. 

2. The BFD: UPS to buy Bomi 

Illustration of a conveyor belt with packages surrounded by shapes and dollar elements.

CVS, after reaffirming its primary care ambitions last week, plans to submit a first-round bid for Signify Health this week, the WSJ reports. 

Zoom in: Initial bids for the company are due this week, and CVS may see competitive bids from other managed-care providers and PE shops, the report says. 

Signify shares soared 14.5% to $22.77 per share in morning trading today. 

Flashback: Axios on Friday identified two banks that are working with the health tech company on a potential sale.  

The big picture: CVS' previous attempt to acquire One Medical came to a quick halt last month when Amazon announced a surprise $4 billion deal for the primary care company. 

Now, the retail giant appears hell-bent on making another transformative bet to deepen its health care footprint.

3. CVS reportedly plans Signify bid  

InBrace, a tech-enabled orthodontic company, raised $45m in financing led by Horizon Technology Finance Corporation. https://axios.link/3Qakowa 

Marken, a unit of UPS Healthcare, agreed to acquire the medical courier business of Cedra Express, a New Zealand-based transportation and logistics provider serving the life science and pharmaceutical segment. https://www.cedra.co.nz/ 

4. Deals 'o the day

Trusted named Beatrice Pang chief financial officer, from Tempo. 

Health Catalyst named Melissa Welch chief medical officer and  Edward Sheen chief population health officer and senior vice president.

Solomon Partners named Aryeh Sand managing director in its global health care group, with a focus on life sciences. 

5. It's Personnel 

Happy Monday, and welcome to another week of health care dealmaking.  

🚨 Situational awareness: We got bought. Existing investor Cox Enterprises is acquiring Axios for $525 million, CEO Jim VandeHei emailed staffers this morning. More from Sara Fischer.

🤤 Sarah this weekend hit up new Williamsburg hotspot Bonnie’s with a crew of friends and essentially tried everything on the menu. Worth the hype — you won't regret it. 

❤️‍🔥 Thanks for reading Axios Pro Health Tech! Please ask your friends and family to sign up.

August 08, 2022

1 big thing: Kohlberg's Trinity gets another backer