Two lower-middle-market private equity firms scored a healthcare services deal last week that largely avoids questions around Medicaid coverage that surfaced in the newly signed “Big Beautiful Bill.”
Just days after the legislation was enacted, significantly altering terms for Medicaid eligibility, Angeles Equity Partners and Kain Capital agreed to merge their respective platforms, Agile Occupational Medicine and Akeso Occupational Health, into a single entity. Each firm will own 50% of the new entity, which will serve patients across 42 locations in California and Arizona.
The deal in occupational health, a segment that helps prevent and treat job-related injuries and illnesses, marks an exception to the broader slowdown in the healthcare services market.
“I think [PE buyers] have stayed away from things like, you know, Medicaid and associated businesses,” said Kunal Kain, managing partner of Kain Capital.
“That’s why I think occupational medicine is a space insulated from those trends. It’s a service provided by employers for their employees.”
He added that aside from regulatory oversight, government involvement in occupational medicine is minimal.
According to PitchBook data, platform buyouts in healthcare services dropped significantly to 18 in Q1 2025 from 32 in Q4 2024.
Meanwhile, the number of healthcare services companies newly acquired by private equity firms fell from 103 companies in 2024 to just 17 in 2025 so far.
“There are only so many assets to acquire to get to scale. Now you can do acquisitions—that is, one clinic, two clinic deals—which end up taking the same amount of time as it does to do a larger transaction,” Kain said.
Beyond healthcare, the new company will also benefit from what Angeles Equity identified as tailwinds in the industrials space.
“When you think about the current policy objectives of the current administration with respect to onshoring and reshoring of manufacturing and the industrial economy, these are very labor-intensive industries,” said Adam Lerner, operating partner at Angeles Equity Partners.
Agile provides care to injured workers, focusing on case management to ensure timely returns to work. The company was acquired by Angeles Equity Partners in 2022.
Akeso provides similar services, partnering with employers, employees, and insurers to facilitate comprehensive medical care. Kain Capital invested in the company back in 2020.
Featured image by Samuel Corum/Getty Images
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