US Acute Care Solutions buys out minority partner, aided by $470 million commitment from Apollo Global Management

Canton, Ohio-based US Acute Care Solutions, a provider of physician-owned emergency medicine, hospitalist and observation services, is buying out its minority capital partner with the help of a big preferred equity investment made by funds managed by affiliates of the giant Apollo Global Management Inc. (NYSE: APO) of New York.

US Acute Care said in a news release that its physician-owners agreed to buy out New York-based private equity firm Welsh, Carson, Anderson & Stowe, and that following the transaction, the company will be 90% owned by its physicians. Several health systems also will have minority stakes in the company, according to the release. Welsh Carson helped form US Acute care in 2015.

The deal is expected to close in the first quarter of this year.

Apollo Global Management helped make the recapitalization of US Acute Care possible. In its own release, Apollo said funds managed by its affiliates “have committed to invest up to $470 million of preferred equity” in US Acute Care. As part of the transaction, two Apollo representatives will join the US Acute Care board of directors.

US Acute Care was founded by 15 emergency medicine and hospitalist physician groups across the country. It says it provides care to about 6 million patients annually at more than 220 locations in 19 states. The company has about 3,000 clinicians.

Dr. Dominic J. Bagnoli, executive chairman of the US Acute Care board, said in a statement that Welsh Carson’s “faith in our vision of physician ownership has created the opportunity for our physicians to take full control of our future. For years, skeptical observers noted it would only be a matter of time before physicians lost control of their practices entirely. We were determined to prove them wrong, and we have succeeded.”

James Frary, CEO of US Acute Care, added, “There is no question this move signals growth ahead for USACS, and it distinguishes us as the standard bearer in our industry for the scaled partnership model.”

In the Apollo release, Jason Scheir, an Apollo partner and head of the firm’s U.S. Hybrid Value platform, called US Acute Care “a highly reputable leader in acute care clinical staffing for health systems across the country. We were pleased to work with their board and management team to structure an investment solution that allowed USACS to continue to be controlled by its physician owners, while positioning the business for additional growth with our capital and strategic support.”

Apollo noted that its investment in US Acute Care follows a year in which the Hybrid Value platform “announced sizable investments in companies across a range of industries and geographies, including Alorica Inc., a leader in customer experience solutions; Sazka Group, one of Europe’s leading private lottery operators; and Expedia Group, one the world’s largest online travel agencies.”

Apollo had assets under management of about $455 billion as of Dec. 31.


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