DFW Capital Partners has sold Covenant Surgical Partners to KKR. DFW acquired Covenant in January 2013 in partnership with PineBridge Investments and Iroquois Capital.
Covenant is an owner and operator of ambulatory surgery centers (ASCs) focused on endoscopy and ophthalmology specialties. Covenant also owns interests in several related medical practices, as well as anesthesia operations and its own anatomical pathology lab business. The company is headquartered in Nashville (www.covenantsurgicalpartners.com).
Covenant’s operating model is to acquire majority interests in single or limited specialty ASCs with a minority investment retained by the center’s affiliated physicians or physician groups. Covenant then brings its systems and procedures to the acquired centers and also consolidates financial, administrative, regulatory, contracting and human resources management functions.
During DFW’s ownership term, Covenant grew to 35 ambulatory surgical centers (ASCs) from 19 at the time of acquisition and expanded its management team and systems capabilities. “It has been a privilege to partner with the Covenant team in building one of the premier ambulatory surgery platforms and physician services companies in the nation,” said Keith Pennell, Managing Partner at DFW Capital Partners.
DFW invests from $15 million to $50 million in lower middle-market service companies. Sectors of interest include healthcare and outsourced business and industrial support services. The firm is headquartered in Teaneck, NJ, and has an additional office in Chevy Chase, MD (www.dfwcapital.com).
“This transaction marks the next stage of Covenant’s evolution,” said Lew Little, Chief Executive Officer of Covenant. This is the second time I’ve had the opportunity to work with KKR. Having seen firsthand what their partnership and resources can contribute to a company, I am thrilled to welcome them to the Covenant family and together accelerate our future growth.” Mr. Little was previously the CEO of Harden Healthcare. KKR led a debt refinancing for Harden in 2010.
KKR (NYSE:KKR) makes private equity, fixed income and other investments in companies in North America, Europe, Asia and the Middle East. The firm has $148 billion in assets under management. KKR was founded in 1976 and in addition to its New York headquarters has offices in 19 cities around the world (www.kkr.com).
“Covenant provides an important role in improving patient access and reducing costs for the healthcare system. We look forward to partnering with Covenant in building a premier professional services organization to support its affiliated surgery centers and physician practices,” said Jim Momtazee, Head of KKR’s Health Care investment team.
Piper Jaffray was the financial advisor to Covenant on this transaction.
© 2017 Private Equity Professional | October 10, 2017
