A-Z of Healthcare: L-P

The third part of our A-Z looks at logistics, mental health, nursing homes, outcomes and pharmaceuticals.


The covid pandemic led to an unprecedented surge in demand for medical devices and equipment. Indeed, the first half of 2020 saw trade in personal protective equipment jump by 50 percent compared with the previous year, with global imports and exports of medical goods increasing by 15.8 percent in the same period, according to UPS Healthcare.

A-Z of Healthcare LogisticsMeanwhile, the increase in medical trade has only intensified as the race to provide the world with vaccines has begun.

Some of these vaccines, in particular, have required a revolutionary approach to healthcare logistics, including the ability to transport in thermal containers to keep them at sub-zero temperatures as they travel on to airlines and distribution hubs.

The long-overlooked sector that is healthcare logistics is now deemed ripe for investment, according to ArchiMed partner Vincent Guillaumot. “Given the pandemic-driven spike in demand for healthcare materials of all kinds, this is not surprising. There are enormously promising investment opportunities in logistics – firstly in consolidating a sector fragmented along regional, not even national lines, and secondly in developing relatively low-cost, scalable technologies for the easy, safe and sanitary stocking and delivery of every healthcare related good imaginable.”

ArchiMed has built up its own healthcare logistics group BOMI, which carried out six major acquisitions in Europe and Latin America between May 2020 and January 2021.

Another key theme helping to shape the healthcare logistics sector is a recognition of a government’s need to secure their healthcare supply chains, something vaccine and PPE shortages have brought to the fore.

“It is important to make sure some aspects of production and supply chain remain national,” says Arthur Brothag of Apax Partners, citing, not just covid, but incidences of impurities in drugs used to control blood pressure that were found to be carcinogenic in 2018. “All of a sudden, a good part of that stock had to be recalled and replaced and new suppliers had to found. I think the move towards low-cost offshoring of production, to locations such as China and India, is slowing.”

Nordic Capital’s Raj Shah believes this shift towards repatriation will create opportunities to build local champions.

“Globalisation has been the dominant theme in recent years, and while I don’t think the pendulum will swing back entirely, so that everything has to be done within an individual country’s borders, I do think self-sufficiency will be prioritised,” he says.

Mental health

From the pressures of lockdowns to the opioid crisis, the need for improvements in the quality and quantity of care provision is palpable.

A-Z of Healthcare Mental healthWaterland Private Equity’s £1.08 billion ($1.52 billion; €1.25 billion) acquisition of the UK’s behavioural and mental health care provider the Priory Group, at the end of last year, marks recognition of soaring demand for mental health services.

Kevin Taggart, managing partner of healthcare M&A adviser Mertz Taggart, which is focused on the behavioural and hospice care industries, believes M&A activity in the sector could peak in 2021. He says: “Everything from substance-abuse companies to medically assisted treatment; treatment for eating disorders; autism care and care for those with developmental issues, have all continued to perform well throughout the pandemic. Some sectors are hotter than others, but they’re all pretty attractive right now.”

Nursing homes

Nursing homes have been largely out of favour in recent years, with private equity choosing to invest behind homecare services, instead.

A-Z of Healthcare Nursing homesWith longer life expectancy, an ageing population will increasingly seek to ‘age in place’ and receive care in their homes,” says Mike Balmuth, managing partner of SV Health.

“Consequently, home health delivery of skilled nursing care should experience sustained growth. We also expect care delivery to be enhanced through innovative digital health and tech-enabled services.”

But David Porter, founding partner of Apposite Capital, believes some care homes could be poised for a comeback. While not an area that Apposite invests in, Porter says there is undoubtedly still a yawning gap in the provision of specialist services.

“There was a lot of over-leveraging that went on,” he says. “But that gap in the market remains so I think we may start to see more activity again.”


As public finances face unrelenting pressure post-covid and the demands placed on healthcare systems escalate, the need to measure outcomes in order to drive accountability is increasing across the world.

A-Z of Healthcare OutcomesProviders of advisory services to hospitals and physician practices are at the forefront of this trend. VSS, a US private equity firm focused on providing flexible capital to the lower mid-market, invested in Caravan Health in 2018, which offers value-based care advisory services, helping hospitals and other providers improve quality, lower costs and focus on outcomes.

“Everything is tracked and managed,” says David Bainbridge, VSS managing director. “It all comes down to data. We track things like patient attendance at annual wellness visits, making sure any chronic issues that are identified are treated and advanced care planning [is managed]. We are managing hundreds of thousands of lives and specific data points are so important to measure how well we’re doing.”


The global pharmaceuticals industry has become the darling of private equity in recent years.

A-Z of Healthcare PharmaceuticalsVincen Pautet, a partner at Charterhouse Capital Partners, believes ongoing disposals of non-core drug portfolios from pharma conglomerates represent particularly interesting opportunities for targeted buy-and-build strategies. He cites Charterhouse portfolio company Cooper Consumer Care, a French OTC pharmaceuticals manufacturer and distributor, which the firm merged with Dutch Vemedia to create a European platform.

“We then grew the business to an EV of over €2 billion through eight add-on acquisitions including a portfolio of drugs from Sanofi,” adds fellow Charterhouse partner Pierre de Sarrau.

Jan Pomoell, co-head of the health team at Triton Partners, agrees that a fundamental restructuring of the pharmaceutical industry is leading to a spate of opportunities.

“Twenty years ago, most companies would have defined manufacturing and R&D as core, but they are increasingly relying on third parties to enhance innovation and improve the cost and time efficiency of these processes,” he says. “We have also seen big pharmaceutical companies divesting old products. For example, our portfolio company Pharmanovia buys stagnant products from big pharmaceutical companies and gives them a new life.”

Tom Allen, managing director at Advent International, also sees opportunities to snap up non-core disposals as the large-cap pharma sector restructures. In addition, Advent is investing in outsourced services to the industry; for example, companies supporting global clinical trials and drug commercialisation. “Finally, we are spending a lot of time looking at businesses manufacturing active pharmaceutical ingredients,” Allen says.

For Apax Partners, the key is targeting those businesses that exist between the multi-billion market cap pharma giants at one end of the spectrum and generics companies focused on non-branded, patent expired products at the other.

“There is a plethora of mid-sized companies ripe for transformation,” says Apax partner Arthur Brothag. “We see opportunities to invest in companies targeting specific therapeutic areas, for example Neuraxpharm, which focuses on central nervous system drugs treating illnesses such as Alzheimer’s, depression, Parkinson’s and epilepsy. We invested in incremental innovation.” In the case of Neuraxpharm, it took an epilepsy drug in a large tablet form and put it into an easier-to-swallow sachet for children and the elderly.