Centre Partners has made its second acquisition in the US healthcare market acquiring nursing home company Covenant Care for an undisclosed sum.
The Los Angeles-based mid-market private equity firm bought Covenant in partnership with the company’s management, which according to a statement from Centre Partners will remain in place. Covenant operates 43 nursing homes and three residential care facilities in seven US states providing 24-hour a day long-term rehabilitative care.
The deal follows Centre’s $550 million (€347 million) purchase of 100 dialysis clinics from Fresenius Medical Care and Renal Care Group in 2006. The transaction was made through its portfolio company, DSI Holdings, the third largest for-profit provider of outpatient kidney dialysis services in the US.
It also comes as private equity real estate firms target senior living and healthcare businesses in countries with aging populations, such as the US.
Last year, LaSalle Investment Management acquired a portfolio of nine medical office buildings located in the greater Albany metro region of New York State from New York-based real estate company First Columbia for $100 million. The properties were acquired by LaSalle’s Medical Office Fund II, a private real estate investment trust.
The Carlyle Group also hit the headlines when it bought Toledo, Ohio-based Manor Care, a provider of short-term post-acute and long-term health services, in a deal valued at $6.3 billion. Carlyle picked up more than 500 nursing and rehabilitation centers, assisted living facilities, outpatient clinics, and hospice and home care facilities in the deal. Manor Care reportedly owned around 98 percent of its property portfolio.
Centre senior partner Bob Bergmann said in the statement the firm hoped to expand Covenant's nursing facilities in the future.
As well as healthcare, Centre Partners also targets the industrial products and services, consumer, energy, media, restaurants, retail and aviation services sectors. It is currently investing its fifth fund, which has roughly $880 million in committed capital. According to the firm’s website, Centre Partners invests between $15 million and $85 million in portfolio companies.