Ingenovis Health, a private equity-backed healthcare staffing provider, will continue to participate in competitive auction processes for large quality assets with the assistance of investment bank UBS and its primary lender, Citizens Bank, said CEO Bart Valdez.
However, the company also receives and invites direct approaches from potential targets, he said.
Last year, Ingenovis acquired three companies via competitive auction processes, he said. In December 2022, it acquired Phoenix -based Springboard Health; in April 2022, it acquired KKR-backed VISTA Staffing Solutions (with about 100 employees); and in January 2022, it acquired Orlando, Florida-based Healthcare Support Staffing (with about 220 employees). All three companies generated roughly USD 100m in revenue or more and have grown since their integration into Ingenovis, he said.
This year, the company expects up to three more deals, Valdez said.
Ingenovis was formed in 2021 by Cornell Capital and Trilantic North America, which merged a handful of staffing companies together, including Fastaff Travel Nursing, US Nursing Corp., and Trustaff Management and CardioSolution.
With eight companies in total now combined, Ingenovis is generating nearly USD 2bn in revenue with EBITDA margins around roughly 14%, said the executive.
Ingenovis is on the hunt for companies generating between USD 75m and USD 200m in revenue that could expand its “ecosystem” of healthcare staffing solutions outside the hospital, Valdez said.
Areas of immediate interest, he said, are companies that recruit nurses or doctors in the fields of behavorial health, tele-health, virtual health monitoring, or educational healthcare systems.
Also attractive are acute care staffing agencies that bring international nurses and doctors to the US, he said. While it is currently operates in the US, Ingenvois will look to expand its international presence in the future to countries like Germany and France, he noted.
Ideal targets have “sound tech or processes” that can be easily adapted into Ingenvois’ platform and are “scalable,” he said. It wants good financials and strong management teams that want to stay and grow with the company, he noted.
He said he expects more conservative buyers in 2023 given today’s high interest rates and market volatility.
“Acquisitions in this market were frenzied in 2021 and 2022,” said the executive. “But the financial markets have changed dramatically and there are probably less buyers out there now.”
Ingenovis stands apart from competitors because it aims to offer doctors and nurses full-time, part-time, and temporary positions and opportunities to work in underserved or rural communities, Valdez said.
Regarding an exit, Valdez said if Ingenovis were to double in size in roughly three years, it could consider an IPO, most likely on the NASDAQ.
Other listed healthcare staffing players include AMN Healthcare [NYSE:AMN] and Cross Country Healthcare [NASDAQ:CCRN].
As an alternative to an IPO, Ingenovis could attract such suitors as human capital management (HCM) firms, he said. Larger players in the space have reached out to learn more about the healthcare staffing space, he said.
Active HCM players include Netherlands-based Randstad, Adecco USA, ManpowerGroup [NYSE:MAN], and Kelly Services—whose medical specialty unit was acquired by Texas-based Ingenesis in 2018, Valdez said.
Big technology as well as big retail companies are also increasingly investing in “healthcare tech” solutions outside the hospital, Valdez explained.
The CEO pointed to the likes of Apple [NASDAQ:AAPL] and Google [NASDAQ:GOOGL] on the technology side as well as CVS [NYSE:CVS] and Walgreens [NASDAQ:WBA] in retail.
“They used to compete on retail and pharmaceutical sales, but now they are competing on services,” he said. “As more services leave acute care hospitals and go into service centers, it could be an efficient way to deliver healthcare.”
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