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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

New State Capital is exploring a sale of United Medical Systems, a provider of mobile medical equipment for urologic conditions like kidney stones and prostate cancer. 

Driving the news: A Houlihan Lokey-run sale process is underway, with IOIs for the Westborough, Massachusetts-based company fielded earlier this month, sources tell Sarah.

$23 million of EBITDA is marketed for the business, they add. 

How it works: UMS provides transportable in-house medical services to hospitals, ambulatory surgery centers and physician offices. 

Services include shock wave and laser lithotripsy to treat kidney and ureteral stones and MR/US fusion biopsy for the detection of prostate cancer. 

The company boasts that its mobile concept lends to various advantages, like an additional revenue stream that doesn't require major investment in equipment or personnel. 

Its flexible scheduling model and in-house set-up lend to the appearance of a full-time program within facilities, it says. 

What they're saying: End-market demand for kidney stone management is large and growing, but one consideration is how private equity consolidation of urology groups impacts this model, one source says. 

That is, larger platforms may increasingly see a reason to bring additional services in-house, like lithotripsy. 

State of play: Consolidation in the broader urology specialty remains in its early days, though the growing list of PE participants includes:

Triton Pacific Capita, Gauge Capital, Silver Oak Services Partners, NMS Capital, Lee Equity, Prospect Hill Growth Partners and Audax Group. 

Yes, and: Perhaps the most relevant mobile medical equipment player is Healthtronics, which Altaris Capital acquired in 2014 — the same year New State entered the space. 

Flashback: New State Capital in November 2014 carved out UMS from its German parent company, UMS United Medical Systems International AG. 

UMS in September 2021 named Michael Martin CEO, after the seasoned executive led Results Physiotherapy as CEO through its sale to Upstream Rehabilitation.

New State Capital and Houlihan Lokey declined to comment. 

1 big thing: New State's United Medical Systems hits the market 

Unified Women's Healthcare, one of the country's largest providers of practice management services dedicated to women, acquired Gennev, a Seattle-based digital menopause care delivery platform.

Why it matters: The deal could be a harbinger as traditional health care providers with scale and distribution look to buy innovative digital health entrants in its space, Sarah writes.

Catch up quick: Unified has been proactive on the M&A front but Gennev appears to be its first splash in digital health. 

Altas Partners joined Ares Management as an investor in Unified Women’s Healthcare in 2020, valuing the women's health company between $1.5 billion and $1.6 billion, Sarah wrote then.  

About six months later, Unified dove into fertility services, acquiring CCRM from TA Associates in a transaction which, according to Moody's, totaled $775 million including $430 million of equity. 

It followed with the 2021 acquisition of Women’s Health USA, or WHUSA, another sizable women's health-focused PPM company. 

Between the lines: Unified gives Gennev a large avenue through which it can scale while amplifying offerings around a large underserved pocket of women's health — menopause care.

78% of women experience physical and emotional symptoms that can have a detrimental effect on wellbeing, work and relationships, but only one in five will seek care, the release says. 

Gennev via its telemedicine platform provides personalized care plans for menopause care that incorporate prescription medication, lifestyle changes in nutrition, fitness and mindfulness, and natural supplements.

Flashback: Gennev in 2019 collected $4 million in seed funding led by BlueRun Ventures. Maven Ventures and Startup Health participated in the round. 

The company was founded in 2010 by former Microsoft exec Jill Angelo.

2. The BFD: Unified buying Gennev

Illustration of a medical diagram of a uterus with pills falling all around it. 

Telemedicine-based abortion care provider Hey Jane raised $6.1 million, confirming our colleague Dan Primack's reporting from May.

Why it matters: Despite the renewed focus on women-centered startups, fundraising for Hey Jane has been difficult in today's current political climate, co-founder and CEO Kiki Freedman tells Bloomberg. 

“I’d be lying if I said it was easy," Freedman says.

Several firms declined to invest for political reasons related to their limited partners, she noted. “They may not want to ruffle feathers with their own investors,” she adds.

Deal details: Women-founded funds Ulu Ventures, The Helm, Amboy Street, Portfolia and G9 led the round and were joined by Social Starts and Yard Ventures.

The fresh capital brings Hey Jane's total funding to $9.7 million since its launch in 2021. 

Context: The historic reversal of Roe v. Wade has turned investor attention to the underfunded women's health tech sector, with some backers focusing specifically on virtual forms of abortion care.

Data from February suggests telehealth-based abortions, in which a virtual provider provides pills that terminate a pregnancy, were already the preferred and most accessible means of abortion.

Hey Jane is among a crop of new and recent venture-backed women's care startups including Tia Clinic and Favor (formerly The Pill Club) providing hybrid health care services focused on women.

Choix (which raised $1 million in seed funding in June) AidAccess and Just the Pill also prescribe pills for inducing abortions in certain states and have seen demand surge since the June Supreme Court ruling.

How it works: New York-based Hey Jane provides mifepristone pills for inducing abortions to patients in eight states.

What they're saying: Hey Jane's success validates industry experts' expectations that Roe's reversal would drive new investment into women's health. 

“This is going to drive innovation by necessity,” Goodwin Procter health care attorney Delphine O’Rourke told Sarah this summer.

“[Access to women’s health] is a super unmet need in a large market, and rational investors see that as an opportunity,” added SVB Securities banker Sasha Kelemen.

"While this is frustrating and certainly not a moment we'd expect to be in 2022, it's a moment for us as a company to lead," Favor VP of market access Tom Roark told Erin in July.

Where it stands: Since Hey Jane's launch last year, it has supplied roughly 20,000 people with abortion care.

What's next: Hey Jane will use the new capital to hire more staff, expand nationwide, and introduce virtual care for other issues such as postpartum depression, per Bloomberg. 

“I know this space is underserved and underfunded,” Carli Sapir, a Hey Jane investor and founding partner at Amboy Street Ventures, tells Bloomberg. “But there’s a huge shift in the landscape right now because women are becoming decision-makers in the VC landscape and directing the flow of capital."

3. Telehealth abortion care provider Hey Jane gets $6M

Illustration of the female icon made of a money pattern

Cofertility, a Los Angeles-based egg donation and freezing startup, raised $5m in seed funding led by Initialized Capital and Brit Morin’s Offline Ventures. https://axios.link/3yRyoUU

BioIntelliSense, a Denver-based health monitoring company, acquired AlertWatch, an Ann Arbor, Mich.-based developer of FDA-cleared patient monitoring software. https://biointellisense.com

4. Deals o' the day 

Karoo Heath named former Cityblock health chief operating officer Chentelle Lane its COO.

5. It's Personnel 

Howdy, Health Tech readers. It's Wednesday. 

Situational awareness: CVS has reportedly walked away from a potential acquisition of Cano Health, per Dealreporter. 

📺 Sarah is watching the fourth season of "The Sinner" and recommends it if you're looking for a spooky drama murder mystery to binge.

✅ Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your friends and colleagues to sign up.  

October 19, 2022

1 big thing: New State's United Medical Systems hits the market