Preparing a PE-Owned LTC Services Provider for an Ownership Change

Background

As the baby boomer generation continues to age, the demand for skilled nursing facilities (SNFs) has skyrocketed. Against this backdrop, a leading provider of on-site clinical services in long-term care (LTC) settings with a significant presence in SNFs, which was owned by a private equity firm, wanted to prepare for a potential transition in its ownership.  

One of the firm’s funds was looking for opportunities with the double benefit of both financial return for its investors and societal good. L.E.K. Consulting’s project was to help with sell-side support for this provider, which was one of the crown jewels in the firm’s portfolio. By seeking our help, the provider learned how a shift toward LTC-focused medical groups meant the market for on-site clinical services was growing despite challenges to the SNF industry overall. 

Approach

Indeed, feedback gleaned through surveys and interviews that we conducted with experts suggested there were strong opportunities for expansion into adjacent clinical service lines. We further identified ample room for growth in new geographies and in cross-selling service lines to the provider’s current customers. And our team confirmed that the model pioneered by the provider, whereby nurse practitioners and physician assistants provide day-to-day care in on-site clinical specialties under the supervision of a physician medical director, was both commonly accepted by and appealing to SNF operators.

Finally, we sized the market for on-site clinical services in the U.S. through four different lenses, and characterized growth opportunities for each of them.  

Results

With L.E.K.’s help, the provider was successfully transitioned to another healthcare expert investor ready to enable ongoing growth. This successful transaction allowed the firm to expand its double-impact strategy and positioned the provider to continue offering an increasingly critical service to a rapidly aging population. 

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