Blackstone, Omers eye billion-dollar healthcare exits amid PE shift

USA – Private equity giants Blackstone and Omers are preparing to exit key healthcare investments as part of a broader industry trend toward selling off long-held assets.

Blackstone has hired advisers to explore the potential sale of its majority stake in HealthEdge, a provider of health insurance software.

The deal could value HealthEdge at more than US$ 2.5 billion, according to sources familiar with the matter. Blackstone had previously tested market interest in 2022 but didn’t move forward with a sale at that time.

HealthEdge has been performing well, with estimated earnings of US$ 100 million to US$ 120 million last year.

It also attracted a minority investment from Coatue Management in 2021, which valued the company at around US$ 2 billion. These numbers suggest it remains a strong target for other private equity firms or strategic buyers.

Meanwhile, Omers, one of Canada’s largest pension funds, is looking to sell Premise Health, a provider of direct healthcare services for employers.

Premise operates 800 wellness centers across 46 U.S. states, serving more than 2,500 employers. Omers acquired the company in 2018 for just over US$ 1 billion, including debt, and now hopes to secure a US$ 2 billion valuation.

Both Blackstone and Omers declined to comment, and neither HealthEdge nor Premise Health has responded to inquiries.

Why the rush to sell?

The moves by Blackstone and Omers reflect a growing push by private equity firms to exit healthcare investments.

After years of high interest rates that slowed down mergers and acquisitions, many PE firms are now trying to cash out.

A Bain & Company report found that, by late 2023, private equity firms were holding over 2,700 healthcare companies for six years or more – up from 2,100 just five years earlier. Many of these firms are now eager to sell and free up capital for new deals.

Experts say there are several reasons behind this trend:

• Extended holding periods: Economic instability has kept firms tied to their investments for longer than usual – on average 7.1 years, the longest in 20 years.
• Interest rate changes: As rates begin to stabilize, deal-making is expected to pick up again, creating an opportunity to sell at better valuations.
• Investor demand for liquidity: Limited partners seek returns, and firms must demonstrate performance.
• Strong demand for healthcare assets: Despite challenges, the healthcare sector remains resilient and attractive. In 2024, the global healthcare private equity deal value reached US$ 115 billion, with North America accounting for 65% of that total.