Texas Pacific to Buy IASIS
Texas Pacific Group, the buy-out firm, yesterday agreed to pay $1.4 billion to buy IASIS Healthcare, a privately held company that operates hospitals in high-growth areas of the southern and western US.
The move comes as many of America’s hospitals operators suffer sharp reductions in margins, as they seek to upgrade infrastructure through purchasing expensive new technology.
IASIS, based in Tennessee, owns or leases 15 hospitals dedicated to treating “acute” conditions in fast-growing US cities such as Salt Lake City, Phoenix, Las Vegas, San Antonio and Tampa. The company was formed in 1999 by JLL Partners, a New York-based private equity firm, and other investors.
The deal between IASIS and TPG, expected to close at the end of June, is the latest instance of private equity firms buying assets off their peers. Secondary buy-outs, as they are called, used to be rare in the private equity world but have become more popular recently. The pressure to exit maturing investments has come alongside an urgent need for many buy-out firms to put to work the large amounts of money raised in recent funds.
IASIS’s management, led by David White, the chief executive, will remain at the helm of the company under TPG. Mr White hailed the deal as an opportunity to improve IASIS’s access to capital in a way that would allow the company to make new investments and acquisitions.
Lehman Brothers and Merrill Lynch advised TPG. Goldman Sachs and Bank of America advised IASIS.
In explaining its move, which follow investments in healthcare companies Oxford Health Plans and Quintiles Transnational, TPG partner Jonathan Coslet pointed to the geographic location of IASIS’s operations. “(Its) facilities are well positioned in some of the nation’s most attractive urban and suburban markets,” he said.
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