We all knew private equity was keen on healthcare, but for the most part it has been roll-ups of fragmented industries such as dental practices, ophthalmology plays and urgent care services.
With so much dry powder and the markets shaking out some more LBO candidates we are learning that PE's interest in taking care of the aging population also stretches into the large-caps. Case in point, LifePoint (LPNT) , which will be acquired by Apollo portfolio company RCCH HealthCare. The deal follows KKR's KKR takeout of Envision (EVHC) -- a deal that could still have some hiccups ahead -- and the acquisition of health tech company Cotiviti (COTV) by Veritas Capital-backed Verscend. The deal also comes amid reports that Mednax, which operates in a number of service verticals, is also seeing PE interest.
What's interesting about the LifePoint deal is the next steps for Apollo. Sure, there could be divestitures, namely in Arizona and Tennessee, according to Leerink, but Wall Street also seems to think the fund could look to spin out LifePoint's real estate into a REIT. Capella Healthcare in July 2015 sold its hospitals to hospital-focused REIT MPW for $900 million. Ardent Medical and Steward Health have also converted their hospital holdings into REITs, so the precedent and blue print are already in place.
Everyone was fixated on big tech earnings as Alphabet (GOOGL) - Get Report kicked off the week. But others, especially the Tesla (TSLA) - Get Report following, were looking way ahead to September when the auto-tech company will report earnings. TheStreet's Brett Kenwell was no exception. Tesla shares fell more than 5% in the first hour of trading, although bulls were able to stop some of the bleeding. The stock ended down about 3.3% to roughly $303. That's bad news, though, as it leaves shares teetering on vital support. Below $300 and things could become rather precarious going forward. "With earnings on Sept. 1, management better have all of its ducks in a row," Kenwell writes. "That means no more tantrums from CEO Elon Musk because the questions are too boring. It also means giving a serious update to the capital situation."
Markets today: Stocks ended mixed on Monday, July 23, with the S&P 500 and Nasdaq modestly higher and the Dow slightly lower ahead of Alphabet's widely anticipated earnings report. The Dow Jones Industrial Average ^DJI fell 12.95, or 0.05%, to 25,045, the S&P 500 ^GSPC rose 0.18%, and the Nasdaq ^IXIC was up 0.28%.
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