Good morning dealmakers, it’s Obey Martin Manayiti here with the US edition of the Wire from the New York newsroom.
We’ll focus on the latest deal news announced this morning. First, Neuberger and KKR have agreed to acquire a significant minority stake in Datavant, a Phoenix-based health information tech company, from New Mountain Capital for undisclosed terms.
Next, RedCloud Capital has invested in APS Environmental Group, a Bedford, New Hampshire-based provider of environmental testing, inspection, consulting and abatement services. I will also highlight our past coverage in the sector.
Private equity firms have been busy teaming up with AI specialists. We finish with a fresh example of this, as Carlyle announced this morning that it has joined the MIT Generative AI Impact Consortium for a two-year research program that will explore how AI can support investment decision-making and portfolio management.
Data ecosystem
Neuberger and KKR have agreed to acquire a significant minority stake in Datavant, a Phoenix-based health information tech company, from New Mountain Capital for undisclosed terms. New Mountain Capital, which has backed the company since 2014, will retain its control position following the transaction, which is expected to close in the fourth quarter of this year.
Datavant’s ecosystem is used by patients, providers, payers, health data analytics companies, patient-facing applications, government agencies and life science companies to exchange and organize patient-level data for uses including clinical care, value-based payments, health analytics and medical research.
The company’s network reaches more than 80,000 providers, 75 of the top 100 health systems and 350-plus ecosystem partners, with its data reaching 90 percent of the US population and 80 percent of Medicare Advantage plan participants.
In a statement, Blaine MacDougald, a partner and co-head of KKR’s strategic investments group, and James Paquette, a managing director, said they believe Datavant has the potential to scale even further, and their investment will help the company to continue digitizing its platform to capture attractive growth opportunities ahead.
“We have tremendous conviction in Datavant’s differentiated model, strong market position, and the mission critical role that it plays within the healthcare industry,” read the statement.
Impressive growth
RedCloud Capital has made a platform investment in APS Environmental Group, a Bedford, New Hampshire-based provider of environmental testing, inspection, consulting and abatement services.
Based in Denver, RedCloud was founded in 2004 and focuses on the lower middle market.
APS was founded in 2019 by John DeGeorge and has grown from a single-operator practice into a multi-state platform serving restoration firms, insurance carriers and general contractors. The company has facilities in New Hampshire and Maryland and employs 38 people.
“The company has demonstrated an impressive growth trajectory driven by best-in-class response times and technical depth,” said Kevin Mitchell, founder of RedCloud, in a statement.
RedCloud is not alone in picking up opportunities in environmental testing. In May, my colleague Nina Lindholm wrote this listicle that featured deals from GenNx360, Blackstone, Montyon Capital, among others.
Doubling down on AI
Carlyle announced this morning that it has joined the MIT Generative AI Impact Consortium (MGAIC), which brings together MIT researchers and industry participants to advance research and applications in generative AI.
Through the consortium, Carlyle and MIT will explore how AI can better support investment decision-making and portfolio management, according to a press statement.
The research will examine how large language models and other quantitative methods can more effectively identify relevant information, generate investment insights and support decision-making in complex and uncertain environments. The research will also aim to develop new approaches to portfolio construction and capital allocation in private markets.
“AI is already changing how our industry operates, and we continue to see significant potential to use it to make better-informed investment decisions,” said Harvey Schwartz, Carlyle’s CEO in a statement.
“We have decades of investment experience and proprietary data across private markets, and by combining that with the judgment of our investors and advances in AI, we can generate deeper insights to inform how we invest on behalf of our clients,” he added.
Private equity firms have been busy teaming up with AI specialists. Recent examples include:
- Blackstone and Hellman & Friedman recent launch of an enterprise services firm called Ode with Anthropic
- Clearlake Capital Group’s partnership with Databricks and tech consulting firm West Monroe meant to accelerate the adoption of data, analytics and AI capabilities at the PE firm’s portcos
- TPG teaming up with OpenAI
- EQT, Thoma Bravo and Vista Equity Partners have relationships with Google
That’s it from me this morning. Craig McGlashan will bring you the Europe edition of the Wire on Wednesday, while Rafael Canton will write Wednesday’s US Wire.
Cheers,
Obey