- Clayton, Dubilier & Rice acquired wound-care provider Healogics from Metalmark Capital and others in 2014 for about $910 million (~3× 2013 revenue).
- Healogics is a scale leader in U.S. outpatient wound care, operating nearly 600 centers, treating over 215,000 patients annually, and delivering strong clinical and satisfaction outcomes.
- The deal adds Sechrist Industries’ hyperbaric oxygen therapy chambers, giving CD&R a combined services-and-device platform in advanced wound care.
- CD&R is betting on growth in chronic wound demand, hospital outsourcing, and outcomes-driven reimbursement, while facing reimbursement, regulatory, and integration risks.
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The acquisition of Healogics by Clayton, Dubilier & Rice (CD&R) represents a classic private equity play in a healthcare services sector characterized by strong clinical outcomes, scale advantages, and growing demand. Valued at approximately $910 million in 2014, the deal reflects a multiple of revenue (~3× 2013 sales of $300 million), signaling investor confidence in both Healogics’ financial stability and growth potential. [1][2]
Key value drivers identified in the transaction include Healogics’ market leadership—managing nearly 600 wound care centers across the U.S.—and its comprehensive service offerings via Sechrist Industries. The inclusion of HBOTCs (hyperbaric oxygen therapy chambers) adds a device/manufacturing dimension to what is otherwise a services-oriented business. [1][2][3]
CD&R’s stated strategic rationale emphasizes several trends: first, the under-served and growing chronic wound patient population; second, the shift toward hospital outsourcing of specialized outpatient services; third, the necessity for strong clinical outcomes and patient satisfaction metrics when negotiating with payors. These factors all align to support premium valuation, but also impose performance risk, particularly around scaling while maintaining outcomes. [1][2]
Potential challenges and uncertainties include reimbursement pressures, capital intensity for device-centric components (hyperbaric chambers), regulatory risk, and integration of Sechrist Industries into Healogics’ broader operations. Also, achieving the projected growth may depend on managing patient volume, payer mix, and maintaining high satisfaction and heal rates under CD&R ownership. Long-term value creation will likely rest on expanding center footprint, improving operational efficiency, and potentially diversifying care settings or clinical services.
Strategic implications for stakeholders:
- For CD&R: opportunity to scale Healogics further, improve margins, and possibly exit via sale or public offering once growth and performance targets are met.
- For competitors and providers: sets a benchmark for valuation in advanced wound care; may intensify competition in hospital outsourcing and partnership models.
- For payors and regulators: outcomes‐based care will be scrutinized, especially with significant investment in specialized services.
Supporting Notes
- Transaction value: CD&R acquired Healogics for approximately $910 million. [1][2][3]
- Revenue: Healogics had approximately $300 million in sales in 2013. [1][2][3]
- Employees: more than 2,000 employees. [1][2][3]
- Network scale: nearly 600 hospital outpatient Wound Care Centers®, representing about one-third of U.S. hospital outpatient centers. [1][2][3]
- Patient volume: over 215,000 patients treated in 2013. [1][2][3]
- Clinical outcomes: 91% heal rate; 94% patient satisfaction rate. [1][2]
- Device manufacturing: operates Sechrist Industries, global manufacturer of hyperbaric oxygen therapy chambers. [1][2]
- Strategic rationale: underserved market, hospital outsourcing trend, growth in chronic wound care population. [1][2]
- Timing: acquisition completed in July 2014; expected closing in Q2-Q3 2014 when initially announced. [1][2][3]
Sources
- [1] www.prnewswire.com (PR Newswire) — May 21, 2014
- [2] peprofessional.com (PE Professional) — July 2, 2014
- [3] www.cdr.com (CD&R) — July 1, 2014
- [4] mergr.com (Mergr) — 2014