Frazier Healthcare Partners is on the prowl for acquisition, as it just closed out its eighth fund at an impressive $525 million. The Seattle healthcare investment firm has a clear investment plan: Buy up profitable healthcare companies in the lower middle market, and help usher forth growth.
Acquisitions in this Frazier Healthcare Growth Buyout fund take the form of leveraged buyouts, recapitalization and carveouts, managing partner Nader Naini said in a phone interview. The companies it’s looking for have between $5 million and $40 million in earnings.
“We’re not looking for development stage companies with this fund,” Naini said. “Of course, the companies we’re interested in are relatively small in the grand scheme of things – but they’re not R&D, which are losing money.”
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Of course, Frazier has a separate fund aimed at earlier stage companies: Just this past October, Frazier Healthcare closed out a $262 million fund to focus exclusively on early stage therapeutics. Two thirds of that fund will be focused on seed or Series A investments, with an intention to commit between $20 million and $40 million per company.
The company closed out its seventh fund, an oversubscribed fundraise of $377 million, in 2013 – and has since deployed that capital. It expects that the eighth fund should last about five years. The general aim is to reach for 10X returns – say, grow $10 million in earnings to $100 million in earnings – and then sell the companies for profit about five years into the investment.
It’s shown this kind of progress in previous investments, including managed care provider Bravo Health, dialysis clinic chain DSI Renal, and drug development services company PCI Pharma Services.
