New Mountain Capital's $6B Bid for R1 RCM
Private equity news the week of March 4th, 2024.
Insights
Chart of the Week: Dell Technologies is still benefiting from being taken private by Michael Dell and Silver Lake between 2013 to 2018, which helped the company transform from being solely a PC-maker to a diversified enterprise technology company. Last week, Dell reported better-than-expected earnings thanks to its server business, which sent the stock soaring +31% to all-time highs. The company is currently valued at $86 billion, up from $16 billion when it re-IPO’ed after the turnaround. (Read Case Study)
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Deal News
New Mountain Capital submitted a $5.8 billion buyout offer for healthcare services provider R1 RCM. The company specializes in revenue management software for hospitals and physician offices. R1 reported $614 million of adjusted EBITDA for the full year 2023 from $2.3 billion of revenue. Company financials have remained strong in recent years, with revenue up +25% last year and adjusted EBITDA up +45%, but its stock price has fallen nearly -50% since mid-2022. R1’s CEO, Lee Rivas, joined the company from Cloudmed, which R1 acquired from New Mountain Capital in 2023. (Source)
Healthcare giant, Baxter International, is in talks with private equity firms about acquiring its kidney care business, called Vantive. The business unit generated $4.5 billion in revenue last year, up +15% from 2021. If a private transaction isn’t reached, Baxter said it will spin-off the business and take it public. Baxter has a history of doing deals with private equity; the company sold its biopharma business to Warburg Pincus and Advent International for $4.3 billion last year. (Source)
Luggage-maker Samsonite is reportedly considering takeover interest from private equity firms. The company is currently valued at $4.9 billion on the Hong Kong stock exchange. Some of the buyout interest comes from PE firms that think the company would perform better as a US-listed company. Samsonite has yet to disclose full year 2023 financial results, but reported $334 million of adjusted EBITDA during the first six months of 2023 from $1.8 billion of revenue. (Source)
