Bear Stearns Merchant Banking, the US bank’s private equity arm, has agreed a $712 million (€525 million) secondary buyout of Universal Hospital Services, a US healthcare group.
UHS, which is based in Minnesota, helps hospitals manage and service their medical equipment. The group was previously owned by US firms JW Childs and The Halifax Group, who took the group private for $15.50 a share, or $133 million, in 1997. The two firms are now set for a sizeable return on their investment.
UHS is also partly owned by its management, who will re-invest in the secondary buyout. The business, which has 75 offices and operates all across the US, claims to help hospitals cut costs, boost productivity and improve results for patients by looking after its medical equipment. After starting life as an equipment rental firm, it now also provides ongoing service and maintenance, ensuring additional revenue streams for each product.
Chief executive Gary Blackford, who will continue to run the business, said: “We look forward to the resources and knowledge our new partners will bring to UHS and our customers. This is another step forward in transforming UHS from an equipment rental company, to a full equipment lifecycle service company.”
BSMB is investing from its third fund, which closed in August last year on $2.7 billion. The deal is likely to close before the end of June.
It is the latest in a string of private equity deals in the healthcare sector, as firms look to tap into a market that is growing substantially due to the ageing population and increased public health spending.