Athelas
The Sharecare and Augmedix deals were much smaller than R1 RCM’s, at $518 million and $139 million, respectively. And Commure, Augmedix’s buyer, isn’t a private equity firm, although it’s been unusually acquisitive for a healthcare startup, making six deals since its launch out of stealth in 2020.
Still, debt rates are expected to keep falling, which should open up more windows for healthcare companies and private equity firms alike to make deals of all sizes.
PitchBook Data’s lead healthcare analyst Rebecca Springer thinks we’ll likely see more large deals like R1 RCM’s buyout this year.
“Folks have been sitting on the sidelines with dry powder, and are feeling more confident about the interest rate environment going forward,” she said.
Where we’ll see more deals
Private equity firms looking for more deals right now are interested in many of the same sectors that VCs are right now — especially AI.
In healthcare, startups have emerged with AI-driven profit structures that are more up private equity’s alley, with less cash burn and a theoretically quicker path to breakeven.
Revenue cycle management has long been a hot area for private equity firms. Medical scribe companies like Augmedix are also picking up steam as dozens of clinical documentation players compete for health system contracts.
Brian Snyder/Reuters
But Holland & Knight’s Marks said private equity leaders he’s spoken with recently aren’t necessarily deterred by regulatory scrutiny as they look for their next buys.
He said the acquisition of R1 RCM, which sells a tech platform rather than healthcare services, simply reflects the growing traction of AI-powered tech for healthcare administration rather than an effort by private equity firms to seek out FTC-friendly deals.
“When I’ve asked them point blank, they’re seeing the regulatory shifts and they know they need to account for it, but it’s not really fundamentally changing their investment pool,” Marks said. “I think it’s just a true, organic interest in the spaces.”