Riverside’s Stewart Kohl talks deal environment at NEXUS 2025; Healthcare technology offering private equity opportunities

Good morning, Hubsters. Senior reporter Michael Schoeck here with the US edition of the Wire from the New York newsroom, filling in for Obey Martin Manayiti for a while.

PEI Group’s NEXUS 2025 summit is in full swing in sunny Orlando. This morning we have a day-one video interview clip with Riverside Company’s co-CEO Stewart Kohl, who spoke with PE Hub editor-in-chief MK Flynn about the deal market environment.

Next up we have a healthcare information technology update from John R Fischer.

And we’ll close out today with a deal announcement involving a healthcare technology add-on.

Bright sunshine forecast

“I understand right now there’s a dip, a bump in the road if you will, caused by a lot of volatility and even a feeling of perhaps chaos,” said Stewart Kohl, co-CEO at Riverside, referring to the current slowdown in dealmaking. “If you think about M&A, it’s the ultimate referendum on the future. If you thought the world was going to end tomorrow, you wouldn’t buy a company today. The world is not going to end, though. The fundamentals which had created the optimism going into the year are still mostly operative.”

The conversation took place at PEI Group’s NEXUS 2025 summit on Monday.

Kohl doesn’t expect the stalled dealmaking environment to last long. The market is looking for “a little greater certainty,” he explained. For example, it would be very hard to sell a classic industrial business in the face of potential tariff increases, but businesses in many other sectors, such as software as a service (SaaS), B2B services, education and training, and franchising are going to be relatively less affected.

“Certainly by the second half of the year, and possibly even as soon as the second quarter of the year, I think we’re going to see animal spirits on the prowl again,” Kohl added.

In 2024, the firm, which is headquartered in New York and Cleveland, completed 16 exits and delivered about $1.7 billion in total distributions back to investors for the year.

If you’re at NEXUS, feel free to shoot PE Hub editor-in-chief MK Flynn ([email protected]) and reporter Rafael Canton ([email protected]) a message if you’re interested in meeting up.

Click here and here to access NEXUS preview interviews with Bridgepoint’s Xavier Robert and EQT’s Suzanne Donohoe, respectively. (Note: Bridgepoint owns PEI Group, the publisher of PE Hub)

Tech-enabled healthcare

Healthcare IT remains one of the most active subsectors for dealmaking in the healthcare industry.

In January, InTandem Capital Partners announced its acquisition of Healthfuse, a revenue cycle management vendor manager, which PE Hub covered in an exclusive story. In November, TPG closed its acquisition of Surescripts, which facilitates electronic pharmaceutical prescribing and health data exchange among providers, payors and pharmacies.

Rife with manual processes, the healthcare industry is still playing catch-up when it comes to leveraging technology. For private equity firms, the healthcare IT lag spells opportunity for deals like these.

“Healthcare is a large and underpenetrated market for technology and despite its increasing adoption, the healthcare industry’s spend on IT remains significantly lower than industries like financial services,” Katherine Wood, partner at TPG, told PE Hub.

To learn more, PE Hub’s John R Fischer spoke with Wood and Art Heidrich, also a partner at TPG; Brad Coppens, senior partner at InTandem Capital; and Rebecca Springer, director of market development at investment bank Bailey & Company.

Fragmentation of third-party vendors is accelerating PE platform investments in the revenue cycle management sector. Almost all US healthcare providers rely on multiple third-party companies for RCM services, creating inefficiencies and operational complexity.

This, according to Coppens, is what attracted InTandem to Healthfuse, a Milwaukee-based company that applies analytics and AI to automate vendor management of front-end, mid-cycle and back-end RCM vendors to help optimize healthcare provider collection performance.

“A quality healthcare IT asset has to have a great product market fit, meaning it has to address the unique needs of a provider organization,” says Coppens. “It has to be a product or service that helps manage workflow. It can’t be a point solution or single dashboard. That only adds to the management complexity a healthcare provider faces.”

Read more on how the under-penetration of healthcare technology is creating opportunities for private equity, including in areas like governance, in the full article.

Clinical assessments

Keeping with healthcare technology for a moment, Clario, a portfolio company of Astorg, Nordic Capital, Cinven and Novo Holdings, announced a late Monday agreement to acquire WCG’s electronic clinical outcome assessments business for undisclosed terms.

Philadelphia-based Clario is a provider of endpoint data solutions to the clinical trial industry. The company was reportedly filing to go public in June via an IPO.

That’s a wrap for me.  Keep an eye out for the Europe edition of the Wire tomorrow from Craig McGlashan and the US edition from Rafael Canton.

Cheers,

Michael