Private equity firm Thomas H. Lee Partners snags Intelligent Medical Objects for $1.5B

By April 1, 2022 June 9th, 2022 News

Private equity firm Thomas H. Lee Partners plans to buy healthcare data enablement company Intelligent Medical Objects in a $1.5 billion deal.

The deal marks an exit for Warburg Pincus six years into its investment, valuing the Rosemont, Illinois-based company at north of $1.5 billion, Axios’ Sarah Pringle first reported Thursday.

Founded almost 30 years ago, IMO manages more than 5 million clinical terms and maps to all major coding systems. The company says its suite of software products, which is used by over 740,000 physicians daily, helps hospitals minimize clinician burnout, reduce unnecessary care and charges, optimize billing and reimbursement and streamline data management. IMO also developed solutions to help improve data quality by streamlining clinical workflows and standardizing patient condition and treatment data.

IMO is embedded within every major electronic health record (EHR) system across more than 4,500 U.S. hospitals and in ambulatory settings. The company’s primary clients span individual doctors and physician groups, hospitals and clinics, large integrated delivery networks, inpatient ORs and surgical centers, global EHR providers, health information exchanges, clinical data registries, payers, life sciences companies and healthcare analytics vendors.

Thomas H. Lee Partners’ investment will support the company’s product development and expanded commercial relationships with hospitals and other healthcare providers.

“At a time when hospitals and physicians feel the strain of heightened demand and limited capacity, IMO’s products help deliver improved patient care and satisfaction. This works to the benefit of those providing care, and those seeking it,” said Joshua Nelson, managing director at THL and head of the firm’s healthcare group, in a statement.

Private equity investors have taken an interest in healthcare and health tech companies. Last fall, Bain Capital and Hellman & Friedman acquired Athenahealth in a $17 billion deal, marking the second time in less than three years the health tech company has changed ownership. The private equity firms picked up the cloud-based EHR company from current private equity owners Veritas Capital and Evergreen Coast Capital. Its purchase, announced Monday, is expected to close in the first quarter of 2022.

Last year, a group of private equity firms reached a deal to acquire medical equipment and supply manufacturer Medline Industries Inc. that would value the company at more than $30 billion in one of the largest leveraged buyouts since the financial crisis.

“THL’s investment in IMO validates the next stage of growth for our business, our products, and our employees,” said Ann Barnes, IMO’s CEO, in a statement, noting that the investment will accelerate the company’s expansion in both provider and non-provider markets.

“IMO has built sophisticated products that eliminate many of the legacy inefficiencies and asymmetries in medical billing, scheduling, and clinical record keeping,” said Shahab Vagefi, managing director at THL, in a statement. “We see a blue-sky opportunity to build on these products and expand the company’s relationships with hospitals and health care providers nationwide.”

Evercore acted as the exclusive financial adviser to IMO, and William Blair acted as financial adviser to THL.