MTS Health Investors LLC has closed its fourth private equity fund at $365 million, underlining dealmakers' optimism that healthcare M&A will regain normal highs.
MTS Health, the private equity fund arm of New York City-based financial service firm MTS Health Partners LP, began fundraising for Fund IV in February. The fund, called MTS Health Investors IV, received additional investments beyond its initial $300 million cap. Fund IV has not made any investments to date, though one U.S.-based company is under a letter of interest. MTS Health’s most recent investments come from the firm’s $188 million Fund III, which closed in 2014.
MTS Health senior managing director Oliver Moses says Fund IV will make similar size investments as previous funds, “writing checks from $15 to $100 million in equity.” Moses tells Mergers & Acquisitions that the firm focuses on investments that bring value to healthcare with: business process outsourcing, diminishing healthcare administrative costs, and helping hospital systems work more efficiently.
The outlook for M&A in the healthcare sector was much more positive in August than it was earlier in the year, according to Mergers & Acquisitions’ Mid-Market Pulse (MMP), a forward-looking sentiment indicator, published in partnership with CT. Recent healthcare deals include The Kroger Co.’s (NYSE: KR) purchase of specialty pharmacy Modern Healthcare; CVS Health Corp.’s (NYSE: CVS) $1.9 billion deal with Target Corp. (NYSE: TGT) for its pharmacies and clinics; and Frazier Healthcare Partners’ agreement to purchase a majority interest in Matrix Medical Network for $538 million.
Kirkland & Ellis LLP served as legal counsel to MTS for the formation of Fund IV and Probitas Partners acted as placement agent.