Technology investment firm Thoma Bravo announced Monday the closing of a growth investment in Bluesight, a software company focused on streamlining the hospital pharmacy supply chain. Thoma Bravo’s investment will fund Bluesight’s acquisition of Medacist, a company that provides analytics on the illegal distribution of prescription drugs, known as drug diversion.
The deal is Thoma Bravo’s second healthcare investment announced so far this year. In March, the firm backed Logex, a European healthcare analytics company.
A healthcare investment is a relatively uncommon play for the firm: Information technology investments dominate roughly 76% of Thoma Bravo’s deal count, whereas healthcare accounts for about 9% of investments, according to PitchBook data.
Thoma Bravo acquired Bluesight as a portfolio company and tacked Medacist on as an add-on acquisition at the same time, Axios reported. The combined company will generate more than $50 million in revenue, according to a person familiar with the matter.
Pricing disagreements and financing challenges have led PE firms to forgo their bread-and-butter leveraged buyouts in favor of smaller add-on deals and growth transactions. Add-ons accounted for 60.7% of all US PE deals in the first half of 2023 while LBOs made up 17.1%, down 2 percentage points from 2022, according to PitchBook’s latest US PE Breakdown.
At the same time, growth or expansion deals accounted for 22.2% of transactions, up 3.7 percentage points from 2022.
Founded in 2011, Bluesight uses AI and machine learning to generate analytics in medication management. The merging of the two companies capitalizes on demand for software to facilitate health systems’ management of medication inventories and compliance, according to a statement from Carl Press, a partner at Thoma Bravo.
“With increased scale and enhanced capabilities, Bluesight and Medacist will have a differentiated market position within this critically important segment of the healthcare market,” Sam Yules, a vice president at Thoma Bravo, said in a statement.
The investment and add-on come as healthcare PE deal activity continues to trail other sectors. In the first six months of the year, healthcare deals comprised 14.4% of US PE transactions, down 1.8 percentage points from the five-year average—a product of pricing gaps between buyers and sellers.
Thoma Bravo declined a request for comment.
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