NewSpring, a family of private equity strategies that invests in the lower-middle market, has closed on its oversubscribed fourth healthcare fund called NewSpring Health Capital IV, the firm announced Tuesday. It raised more than $180 million.
NewSpring Health Capital IV was supported by new and old investors, including strategics, financial institutions and family offices. Triago served as the exclusive placement agent for the fund. A placement agent is a financial intermediary that helps investment funds raise capital from investors.
With the fund, the firm is investing in companies that aim to improve efficiency in the healthcare industry and lower costs, said Dr. Kapila Ratnam, NewSpring general partner. NewSpring invests about $10 to $25 million in lower-middle market companies.
“We will continue to implement our current investment strategy, which is focused on services to clinical providers, the healthcare insurance market, the pharmaceutical industry and, most importantly, patients,” Ratnam said in an email. “We invest in companies that help make the healthcare ecosystem more efficient by using technology and human capital differently; companies that deliver care in lower cost settings without compromising quality and outcomes. They are typically companies that have greater than $10 million in sales and have referenceable customers and are in hyper-growth mode.”
Before closing the fund, NewSpring had already made six investments. These investments were:
- AeroSafe Global, a specialized pharmaceutical distribution services provider. It’s using the money to support customer growth and product development.
- BetterNight, a sleep disorders management provider. The company will use the funds for nationwide expansion and adoption of its value-based sleep solution.
- Healthworks, a cardiovascular staffing company. It will use the money to expand its reach into new markets.
- Patheous Health, a mobile dysphagia (swallowing impairment) diagnostics company. It’s using the funds to grow into new markets.
- Prosperity Behavioral Health, a provider of business process outsourcing services to behavioral health programs. The company will use the funds to invest in its technology, expand its services and grow its team.
- Verisma, a company for healthcare disclosure management technology. The investment will “fast track” Verisma’s technology platform.
These companies are “helping clinical providers deliver care more effectively, reducing the cost of delivering drugs to patients, helping manage patients with complex medical conditions with greater efficiency and better outcomes,” Ratnam said.
NewSpring’s funds usually have a 5-year investment period, but this fund will likely be three to four years “due to a robust deal pipeline and the fact that we were investing as we fundraised,” Ratnam added.
Picture: Feodora Chiosea, Getty Images
