Behind Bain' s CitiusTech buy

Sections

Axios Local

Axios gets you smarter faster with news & information that matters

About

Subscribe

Behind Bain' s CitiusTech buy

, author of Illustration: Gabriella Turrisi/AxiosExit Content Preview Bain Capital will join BPEA EQT as an investor in CitiusTech, an outsourced provider of sophisticated technology solutions and consulting services. Why it matters: Health care companies — spanning the medtech, payer, provider and life sciences ecosystems — have big digital transformation and technology-related to-do lists but lack the resources to prioritize such initiatives. That's where CitiusTech comes in. What they're saying: Bain Capital managing director Devin O'Reilly tells Axios his team recognized this large unmet need through its experiences serving on the boards of various health care companies."There's just a huge shortage of product development talent," O'Reilly says, noting the challenges of competing given the tech landscape. "The things they [CitiusTech] are working on with clients are their most pressing issues." CitiusTech has an integral role in helping drive revenue growth and efficiencies, for example. Details: Bain, whose India team led the charge, and BPEA EQT, join hands for a co-control position in Princeton, New Jersey-based CitiusTech. The firms assumed equal ownership from an economic and governance perspective, O'Reilly says. Bain declined to comment on valuation, but O'Reilly says CitiusTech generates "hundreds of millions" of revenue with a growth rate above 20%. CitiusTech works with over 130 health care and life sciences organizations. Its solutions span interoperability, secure data management, quality and performance analytics, value-based care, patient experience, among other things. Context: COVID-related challenges, inflation and labor issues in the U.S. on software investments by providers, by Bain & Co and KLAS Research shows. Between the lines: "There’s this huge mismatch between health care being 20% of GDP and only 5% of tech spend," O'Reilly says. "If you take a 20-year view, it takes a long time to catch up." Flashback: O'Reilly says this is Bain's second run at CitiusTech, having looked at the company before BPEA EQT bought a majority stake in CitiusTech from General Atlantic for about $750 million in 2019. CitusTech this year , pivoting to explore both a traditional IPO and sale that could value the health tech firm at more than $2 billion. What's next: Bain sees a big growth opportunity to both expand CitiusTech's capabilities and customer set, which could include collaboration with some of Bain's other health care portfolio companies.

Go deeper