Healthcare buyouts show resilience

UK-based August Equity has just made its fifth and sixth add-on acquisitions to healthcare platform Enara Group. Investment in the healthcare sector, which is 'slightly immune' to current conditions, remains relatively buoyant.

UK-based private equity firm August Equity has completed its fifth and sixth bolt-on acquisitions for its nursing home platform Enara Group in the latest sign that the healthcare sector’s counter-cyclical qualities are continuing to attract investment.

The total value of deals in the healthcare sector during 2008 was $16 billion globally. The figure represents a 43 percent decline on the 2007 total, but the drop off looks resilient compared to a global buyout decline across all sectors of 70 percent, according to data provider Dealogic.

Healthcare: immune?

Yesterday New York-based private equity firm Welsh, Carson, Anderson & Stowe pumped $100 million into dental prosthetics company GeoDigm Corp. Last week European firm Bridgepoint sealed a €312 million take-private of Finnish healthcare business Terveystalo Healthcare.

“Nothing is quite recession proof but healthcare investment is slightly more immune to current market conditions. Its fundamentals are still very strong and it continues to have government policy to support it as well as local government outsource provision,” Aatif Hassan, a director at August Equity, said in an interview.

August bought Enara and its first add-on, First Call Care Services, simultaneously in November 2008, and as part of the original acquisition strategy the private equity firm allocated a further £20 million for additional buyouts. It has now acquired bolt-on numbers five and six, County Care and The Home Service, for an undisclosed amount.