September 9, 2021
Bain Capital Private Equity purchased the supplier from Great Hill Partners in a deal that values the company at about $1.25 billion, according to people familiar with the matter, The Wall Street Journal reported.
The companies did not disclose financial terms of the deal.
Bain Capital's experience in healthcare and healthcare IT investments include Waystar, Zelis, HST Pathways, IQVIA, Kestra Medical Technologies and Grupo Notre Dame Intermedica.
The company's investments in healthcare providers such as HCA Healthcare, Aveanna Healthcare and Surgery Partners offered insights into the challenges that providers face, Devin O’Reilly, a managing director at Bain Capital Private Equity told Fierce Healthcare.
"We see both the challenges and opportunities to help health systems optimize their business, whether that’s assets they have or making sure med-tech equipment is up and running and functioning so they can provide care for patients," he said.
PartsSource operates an online marketplace for medical equipment maintenance parts and services, almost like an "Amazon of Healthcare," with a website that connects hospitals and medical clinics with vendors and repair professionals to find replacement equipment, parts and services.
The company's cloud software and marketplace technology tools help hospitals source on-demand parts and services.
Last year, PartsSource expanded its marketplace network from parts into on-site and off-site repair and service solutions.
PartsSource’s marketplace connects more than 3,500 hospitals and 15,000 clinics, with more than 8,000 Medtech OEMs and repair professionals across the country. Clients include Community Health Systems, Johns Hopkins Medicine, Cleveland Clinic, Mayo Clinic Health System and New York-Presbyterian.
Started in 2001, PartsSource is based near Cleveland. Following Bain Capital’s investment, the business will remain under current management led by Philip Settimi as president and chief executive.The investment will help PartsSource continue to accelerate its growth trajectory, broaden its solutions portfolio, and expand its marketplace platform, according to the companies.
As a physician by training, Settimi joined PartsSource in 2014 understanding the value of using technology to improve the hospital supply chain. "I know from my time as a clinician, you're sitting in an operating room or clinical environment, waiting for clinical equipment to be ready at the pace we wanted to deliver clinical care," he told Fierce Healthcare. PartsSource was founded on the idea that an evidence-based, digital approach to the healthcare supply chain can unlock better healthcare delivery, lower costs, and enhance clinical outcomes, he said.
Hospitals and clinics manage a diverse supply chain of medical device and equipment suppliers, he said. "Most of our clients are managing 500 to 1,000 vendors to support that equipment and service requests. The folks who are managing this are well-intended and underpowered. The problem is a people, process and technology one. We don't just build software and deliver it and we don't just deliver analytics; we help them buy more cost-effectively and it really improves cost, quality and productivity of the teams."
The COVID-19 pandemic caught the healthcare supply chain "flat-footed" and highlighted the need for a more strategic approach, which is also accelerating PartsSource's growth, according to executives. (Getty/Kritchanut)