TPG Announces Investment in Compass Surgical Partners to Fuel Growth in Ambulatory Surgery Center Joint Ventures

Rhea-AI Summary

TPG (NASDAQ: TPG) has made a significant strategic investment in Compass Surgical Partners, an independent full-service ambulatory surgery center development and management partner. TPG Growth, the firm's middle market and growth equity platform, is funding the investment, with existing investor Health Velocity Capital participating. The investment aims to accelerate growth and scale capacity in response to increased demand in ASC joint ventures from health system partners. Health systems are increasingly migrating certain surgical procedures to standalone ASC facilities, offering significant cost savings for patients and hospitals, as well as a better consumer experience and convenience for patients. Physicians also prefer to operate in ASCs due to highly customized operating suites and specialized operating room teams.

Insights

Financial Analyst

TPG's strategic investment in Compass Surgical Partners represents a significant move within the alternative asset management and healthcare services sectors. From a financial perspective, the involvement of TPG Growth, known for funding middle market and growth equity investments, suggests a strong confidence in the potential profitability and expansion capability of ambulatory surgery centers (ASCs). The trend towards migrating surgical procedures from hospitals to ASCs is driven by cost efficiencies and patient preferences, which could lead to increased revenue streams for companies like Compass that manage these facilities.

The financial implications for TPG and its investors hinge on the successful scaling and operational efficiency of Compass's ASC ventures. If managed effectively, this could result in substantial returns on investment through cost savings and increased market share in the healthcare sector. However, the undisclosed terms of the transaction make it challenging to quantify the immediate financial impact without further details.

It's also noteworthy that existing investor Health Velocity Capital's continued support may provide additional stability and confidence in Compass's growth trajectory. The strategic partnership is poised to leverage TPG's expertise and resources, potentially translating into enhanced infrastructure and operational improvements that could drive long-term value creation for stakeholders.

Healthcare Industry Expert

The investment by TPG in Compass Surgical Partners is indicative of a broader industry shift towards outpatient care models, particularly ASCs. These centers are designed to be cost-effective alternatives to hospital-based surgeries, offering benefits such as reduced infection rates, quicker turnaround times and improved patient satisfaction. The healthcare industry is increasingly recognizing the value of ASCs in delivering quality care while controlling costs.

TPG's strategic partnership with Compass is expected to accelerate the development of new ASCs and enhance the management of existing facilities. The collaboration could lead to advancements in surgical technologies, streamlined patient care protocols and the implementation of best practices in ASC operations. This is particularly relevant as the demand for outpatient surgical services continues to grow, spurred by an aging population and advances in minimally invasive surgical techniques.

For healthcare systems and providers, the growth of ASCs could represent a paradigm shift in how services are delivered. This trend also aligns with payer and policy initiatives aimed at reducing healthcare expenditures while maintaining or improving care quality. The strategic investment may thus have far-reaching implications for the healthcare delivery model, with a focus on value-based care.

Market Research Analyst

The strategic investment by TPG into Compass Surgical Partners underscores a growing market trend towards ASCs, which have been gaining traction due to their cost-effectiveness and patient-centric approach. Market research indicates that the ASC market is expected to experience significant growth, driven by the increasing preference for outpatient surgical procedures over traditional hospital stays.

With TPG's investment, Compass is likely to strengthen its market position and capitalize on the growing demand for ASC services. The partnership could facilitate the expansion of Compass's network, enabling it to tap into new geographic markets and patient demographics. Moreover, this could lead to a more competitive landscape within the ASC market, as other firms may seek similar strategic partnerships to bolster their growth.

For investors and stakeholders, the growth potential of the ASC market, coupled with TPG's track record in healthcare investments, suggests that this strategic move could yield positive outcomes. However, market analysts would monitor the execution of growth strategies and the integration of TPG's resources into Compass's operations, as these factors will be critical in realizing the anticipated benefits of the investment.

SAN FRANCISCO & RALEIGH, N.C--(BUSINESS WIRE)-- TPG (NASDAQ: TPG), a leading global alternative asset management firm, today announced a significant strategic investment in Compass Surgical Partners (“Compass” or the “Company”), an independent full-service ambulatory surgery center (ASC) development and management partner. TPG Growth, the firm’s middle market and growth equity platform, is funding the investment, participating alongside existing investor Health Velocity Capital. As a strategic capital partner, TPG will bring valuable expertise to the Compass Surgical Partners leadership team, accelerating growth and scaling capacity in response to increased demand in ASC joint ventures from health system partners.

“We have known DJ and the Compass team for a number of years and are excited to partner with such a high caliber team and Company. Compass offers deep strategic and operational expertise to guide its provider partners through the complexities of ASC development and management,” said Zach Ferguson, Partner at TPG. “This investment is a continuation of our longstanding investment thesis around partnering with great operators to build leading ambulatory care networks through joint ventures with health systems and physician groups. We look forward to collaborating with the entire Compass team and the Company’s existing investors in the coming years.”

Health systems nationwide are increasingly migrating certain surgical procedures from hospital outpatient departments to standalone ASC facilities. In addition to significant cost savings for both patients and hospitals, patients often favor the consumer experience and convenience of an ASC. Physicians overwhelmingly prefer to operate in ASCs, which offer highly customized operating suites and specialized operating room teams.

“We are thrilled to partner with the team at TPG Growth, which brings a wealth of healthcare services experience and strategic resources to Compass. TPG’s investment will serve as a powerful growth catalyst, enabling enhanced infrastructure support for our partners,” said DJ Hill, Chief Executive Officer of Compass Surgical Partners. “We are also grateful for Health Velocity Capital’s continued support of our mission and trust in our leadership team. This is an exciting time for Compass and the ASC industry and we are well positioned to provide enhanced value to our joint venture centers, physician partners, and patients.”

Terms of the transaction were not disclosed. Latham & Watkins served as legal counsel to TPG and Crowe LLP advised on accounting, tax, and IT. McDermott Will & Emery served as legal counsel to Compass.

About TPG

TPG (Nasdaq: TPG) is a leading global alternative asset management firm, founded in San Francisco in 1992, with $212 billion¹ of assets under management and investment and operational teams around the world. TPG invests across a broadly diversified set of strategies, including private equity, impact, credit, real estate, and market solutions, and our unique strategy is driven by collaboration, innovation, and inclusion. Our teams combine deep product and sector experience with broad capabilities and expertise to develop differentiated insights and add value for our fund investors, portfolio companies, management teams, and communities. For more information, visit www.tpg.com.

About Compass Surgical Partners

Compass Surgical Partners is a leading, independent, full-service ambulatory surgery center (ASC) development and management partner, representing a nationwide portfolio of joint ventures with health systems and physicians. Its experienced leadership team has developed more than 250 ASCs over the past three decades, making it the partner of choice for high-performance ASCs. Differentiated by its proven track record of success and its agile, aligned operating model, Compass Surgical Partners aims to create strong partnerships that improve the lives of patients and providers. Learn more at www.compass-sp.com.

About Health Velocity Capital

Health Velocity Capital invests exclusively in innovative healthcare software and services companies. The firm’s partners have more than 90 collective years as investors, entrepreneurs, and executives helping to finance and build innovative companies that created important new healthcare markets and that became market leaders, including successful companies such as Teladoc, Livongo Health, Change Healthcare, MDLive, Contessa Health, Headspace Health, Aspire Health, IVX Health, Compassus, Aperio, The Advisory Board Company, Healthways (Tivity Health), US Renal Care, OnShift, Vantage Oncology, Payerpath, and many others. In addition to investing on behalf of institutional investors, Health Velocity Capital invests on behalf of a number of the nation’s largest and most influential healthcare organizations and many of their top executives who collectively represent organizations that provide health insurance to more than 175 million Americans, operate more than 600 hospitals, provide pharmacy and PBM services to all Americans, and provide software and services to every major hospital in the United States. For more information, please visit www.healthvelocitycapital.com.

[1] As of September 30, 2023, including AUM attributable to TPG Angelo Gordon on a pro forma basis.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240122169922/en/

Media

TPG

Julia Sottosanti

media@tpg.com

(415) 743-1550

Compass Surgical Partners

Erin Masercola

EMasercola@compass-sp.com

(919) 593-3805

Health Velocity Capital

Ken Goodhue

ken@healthvelocitycapital.com

(617) 459-3203

Source: TPG

FAQ

What is the ticker symbol for TPG?

The ticker symbol for TPG is NASDAQ: TPG.

What kind of investment did TPG make in Compass Surgical Partners?

TPG made a significant strategic investment in Compass Surgical Partners, an independent full-service ambulatory surgery center development and management partner.

Who participated in the investment with TPG?

Existing investor Health Velocity Capital participated in the investment with TPG.

What is the aim of the investment in Compass Surgical Partners?

The investment aims to accelerate growth and scale capacity in response to increased demand in ASC joint ventures from health system partners.

Why are health systems migrating surgical procedures to standalone ASC facilities?

Health systems are migrating surgical procedures to standalone ASC facilities to offer significant cost savings for patients and hospitals, as well as a better consumer experience and convenience for patients.