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Water Street closes USD750m private equity fund

Water Street Healthcare Partners, a private equity firm focused exclusively on the healthcare industry, has closed its third private equity fund, Water Street Healthcare Partners III.



The fund closed at its cap of USD750m of investor commitments, exceeding the original target of USD650m when fundraising began in early June.

Investors in the fund include domestic and international pension funds, endowments and financial institutions, most of which have invested in Water Street since the firm raised its first fund in 2006.

"We are very pleased with the value Water Street has built in its group of healthcare companies, and the strong results its team has achieved over the past six years," says investment director Brian Welker, Allianz Capital Partners, an investor in Water Street since 2006. "What we appreciate most about Water Street is how it engages its entire team in the value creation process. It leverages the vast experience of its operating partners with the financial expertise of its investment partners to proactively source and invest in attractive companies, strategically expand their products and services, and build them into market leaders."

Water Street has completed more than 30 strategic acquisitions and mergers, the majority of which were privately negotiated, to build 16 healthcare companies in six years. The firm has acquired and grown its companies through partnerships with corporations including Johnson & Johnson, Medtronic and Gentiva Health Services, as well as founders and executives of middle-market companies.

In the past three months, Water Street acquired Breg from Orthofix International, divested its dental pharmaceutical company, OraPharma, to Valeant Pharmaceuticals International, and divested Physiotherapy Associates after building into a national outpatient rehabilitation services leader.

"We are deeply grateful to our investors for their overwhelming support of Water Street. Their recognition of the results our team has achieved and enthusiasm for our strategy enabled us to raise this fund efficiently. Importantly, by extending our partnership, investors continue to support our strategy of building market-leading companies of greater long-term value in targeted growth segments of healthcare. We will continue to invest our team’s deep health care expertise, extensive operating experience and network of industry relationships to create transformational growth for our companies and deliver outstanding results for our investors," says Tim Dugan, managing partner, Water Street.

With Fund III, Water Street’s total capital under management increases to nearly USD2bn. Water Street will continue to pursue proprietary investments in four segments of healthcare: medical and diagnostic products and devices, specialty distribution, outsourced healthcare services, and specialty pharmaceutical products and services. Target investments range in size from USD50m to USD500m in value.

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