September 06, 2022
Health Techies, it's Tuesday and summer is over — although the forecasts in California and New York seem to indicate otherwise.
Situational awareness: Following discussions with Elliott Management, Cardinal Health is bringing on four new independent directors and forming a business review committee to evaluate its portfolio and operations.
1 big thing: Olympus is buying EyeSouth
Olympus Partners last week agreed to acquire EyeSouth Partners from Shore Capital Partners, valuing the eye care services organization at just shy of $1 billion, sources tell Sarah.
Why it matters: Turbulent financing markets have prevented many large health care services assets from trading hands this summer — but EyeSouth bucks that trend.
Between the lines: Stamford, Conn.-based Olympus seems intent on reentering the health care services arena in a meaningful way.
- The EyeSouth deal follows the firm's investment in Onsite Mammography, a provider of women's health imaging services, in December 2020.
- Olympus' history in health care services dates to 2006 when it sold health care staffing company Club Staffing. It previously took AMN Healthcare public in 2001.
Catch up quick: Chicago-based Shore Capital engaged Jefferies several months back to explore a potential sale of EyeSouth, Axios first reported in January.
- Shore initially wanted to bring Atlanta-headquartered EyeSouth to market in 2020, but paused exit plans due to COVID, sources said previously.
By the numbers: EyeSouth provides non-clinical support services to 30 eye care practices comprising over 240 ophthalmologists and 140 locations in 10 states.
- The exact deal multiple isn't clear, but sources originally cited $80 million-plus of EBITDA.
- A figure closer to $100 million was marketed and a lower figure likely underwritten, some of the sources say.
Yes, but: Numbers aside, Olympus gains a big entry point into eye care, and now it can start buying and building out the platform.
- EyeSouth has already achieved scale in the Southeast, and with a bigger fund now behind it, its growth and add-on M&A will likely accelerate.
- Partners Groups' EyeCare Partners, which has been rolling up the space, could serve as a blueprint for EyeSouth.
State of play: Many health care services sale processes are lingering, while others of scale are getting pushed to 2023 launch dates. Besides EyeSouth, other exceptions include...
- Apollo's backing of GI Alliance's physician-led buyout in August (though, with a $785 million preferred and common equity investment at a $2.2 billion value, lining up financing was not an issue) is one example.
- Revelstoke Capital Partners' $700 million-plus bet for Monte Nido & Affiliates, an eating disorder treatment provider, provides another.
Shore Capital declined to comment, while Olympus and Jefferies did not return requests for comment.