Beecken Petty Nears Close On Fund III

Firm: Beecken Petty O’Keefe & Co.

Fund: Beecken Petty O’Keefe & Co. Fund III LP

Target: $650 million

Placement Agent: Credit Suisse

Health care-focused firm Beecken Petty O’Keefe & Co. expects to close its $650 million third fund in the third quarter, a source familiar with the fundraising effort told Buyouts.

The size of the fund, Beecken Petty O’Keefe & Co. Fund III LP, marks a hefty increase from its previous fund, a $325 million fund closed in 2005. New York-based Beecken Petty O’Keefe raised its first $150 million fund in 1997.

Our source said the firm wouldn’t stray from its strategy of mid-market buyouts in the health care industry, though the firm will be equipped to cut slightly larger equity checks. The firm’s sweet spot will be investing $50 million to $75 million in companies generating $10 million to $30 million of EBITDA. Beecken Petty O’Keefe will also occasionally invest in growth-stage companies with enterprise values between $5 million and $50 million in the health care services, medical products and information technology industries.

Investors in the fund include Twin Bridge Capital Partners, a Chicago-based fund-of-funds and co-investment firm.

Beecken Petty O’Keefe’s investment mandate covers a wide swath of the health care industry. Areas of interest include specialty distribution, with a focus on pharmaceutical-related companies and businesses such as surgery centers and psychiatry services clinics that provide medical care outside of hospitals. The firm also focuses on health care outsourcing companies that provide contract management, staffing, billing and other services. In addition, the firm targets hospices, institutional pharmacies and managers of pharmacy benefits programs, as well as companies that manufacture medical and dental instruments.

Beecken Petty O’Keefe has completed three deals so far this year, the most recent being Sterling Healthcare, a hospital services outsourcer it bought last month from Resurgence Asset Management. Beecken Petty O’Keefe was among a slew of private equity firms that sold CryoCor Inc., a company that makes health care supplies, in May to Boston Scientific Scimed for $17.2 million. And in January the firm bought Valitas Health Services Inc., a company that provides clinical contract staffing and related health care management services, for an undisclosed amount.