Reports say Ensemble is close to a $12B private equity bid

Thoreau Group has been in advanced talks to acquire Ensemble Health Partners in a deal that would value the company at roughly $12 billion, according to recent reports from people familiar with the matter.

According to a report from Axios, the private equity and investment firm founded by former New Mountain Capital executive Matt Holt is making a play to acquire Ensemble, thereby becoming the controlling stakeholder in the medical billing and revenue cycle management services company.

This would be another major healthcare deal for Holt, who orchestrated some of the largest and most successful healthcare technology and service deals in the industry for New Mountain Capital. Notably, he was a driving force behind the $8 billion sale of Signify Health to CVS Health in 2022 and the $3.2 billion sale of Equian to UnitedHealth Group's Optum in 2019.

Holt started his own venture late last year with a roll-up plan to acquire five healthcare technology companies from New Mountain Capital's portfolio. However, New Mountain Capital pulled the plug on the deal in March.

Now backed by Apollo Global Management, the Thoreau Group seems to be pivoting to land the multi-billion-dollar deal with Ensemble as its launchpad.

Ensemble provides medical billing, payments and revenue cycle management services to hospitals and other healthcare providers. The company manages more than $46 billion in net patient revenue, with current backers including Warburg Pincus, Berkshire Partners and Bon Secours Mercy Health.

The alleged deal would inject Ensemble with additional capital to accelerate its emerging priorities, including the development of an agentic AI platform for revenue cycle management.

Additionally, the reported deal could enable more aggressive scaling if the Thoreau Group pursues another roll-up strategy, in which it purchases other healthcare technology companies and rolls them up under Ensemble's umbrella.

The deal would also position the Thoreau Group at the center of the revenue cycle management sector, which has been highly valued by private equity.

More healthcare organizations are outsourcing revenue cycle management services under the financial pressures of razor-thin margins and persistently high medical expenses. There is also a growing demand for automation and AI in revenue cycle management to optimize the highly manual tasks that bog down staff. These trends have made the revenue cycle management sector ripe for private equity activity.

The Center for Economic and Policy Research has found that nearly 200 revenue cycle management companies are owned by private equity or venture capital firms as of July 2024. The Private Equity Stakeholder Project has since tracked 47 distinct private equity deals in this space.

Notably, R1 RCM was acquired by private equity firms TowerBrook Capital Partners and Clayton, Dubilier and Rice in an $8.9 billion deal in 2024. The acquisition came after New Mountain Capital offered to buy out R1's other investors.

Jacqueline LaPointe is an Executive Editor at Xtelligent Healthcare Media, covering revenue cycle management, healthcare payers, health policy and health IT since 2016.