Water Street buys into healthcare distributor

Chicago-based buyout firm Water Street is to acquire medical products distributor MarketLab using capital from its $650m second fund, now more than 50% invested.

Chicago-based Water Street Healthcare Partners has agreed to purchase medical products distributor MarketLab, investing up to $70 million of equity in the company.

Marketlab was founded in 1994 and distributes specialty medical products in the laboratory, hospital nursing and magnetic resonance imaging markets. Water Street is investing in the company from its second fund, which closed on $650 million in 2008, exceeding its $600 million target. The fund is currently more than 50 percent deployed, having invested in eight healthcare companies. 

Water Street partner Rob Womsley said in a statement the firm would pursue an “aggressive strategic growth plan” to extend MarketLab’s marketing capabilities into related healthcare markets. The acquisition of MarketLab brings Water Street’s total portfolio of healthcare companies specialising in distribution, life sciences, medical devices and services to 13.

In April, Water Street hired Scott Garrett, the former chief executive officer of biomedical testing company Beckman Coulter, as an operating partner. Prior to working at Beckman Coulter, Garrett was CEO of clinical diagnostics company Dade Behring.

Water Street was founded in 2005 by former executives in the healthcare practice at One Equity Partners, the $5.5 billion private equity arm of JP Morgan. Water Street specialises in the outsourced services, distribution and medical device sectors of the healthcare market, and typically targets deals in the $50 million to $500 million bracket.