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Centerbridge makes $300m pharmaceutical bet

The New York firm has invested in Remedi SeniorCare, a Sterling Partners portfolio company, on the heels of closing its latest fund at $4.25bn.

Centerbridge Partners has committed $300 in equity to Remedi SeniorCare, a portfolio company of Sterling Partners.

Remedi is a Baltimore-based pharmacy that provides pharmacy services to nursing home, assisted living and continuing care retirement communities. Sterling will retain a role in the company’s development.

The firm’s investment will provide growth capital for Remedi, which has grown through the development of its Paxit Automated Mediation Administration System and My Remedi Web Portal.

In a statement, Centerbridge senior managing director Steven Silver cited Paxit, which distributes medication through an automated system, as a programme that could help hospitals and nursing homes manage rising healthcare costs.

Centerbridge, Sterling and Remedi could not be reached for comment at press time.

Remedi

Healthcare has been a hot sector for private equity recently, with many firms selling portfolio companies for high multiples. Earlier this month, KPS Capital Partners’ sale of Attends Healthcare generated a 15x cash-on-cash return and a 120 percent internal rate of return. CCMP Capital made five times its money after selling Medicare services company CareMore Health Group to health benefits company WellPoint in June. During the first quarter of the year, Bowmark Capital sold Advanced Childcare to GI Partners and Onex sold Emergency Medical Services to Clayton Dubilier & Rice, generating return multiples of 4x and 10x, respectively. 

Centerbridge closed its second partners fund on $4.25 billion in May. Centerbridge Partners II generated heavy interest from public institutions in the US, including the state pension systems of Massachusetts, Wisconsin and Oregon, the Texas County & District Retirement System and the Nashville and Davidson County Metropolitan Employee Benefit System.

Former Blackstone executive Mark Gallogy founded Centerbridge in 2006 with Jeffrey Aronson, a former distressed securities expert from hedge fund Angelo Gordon. The firm’s debut fund, Centerbridge Partners I, was generating a 1.26x total value multiple and a 17.5 percent internal rate of return as of 30 September, according to numbers from the Oregon Public Employees Retirement Fund.