Buyout firm MTS pumped up over health care industry

Disease management businesses, whose home monitoring devices aim to catch early signs of heart attacks, are growing as the U.S. population ages. And at least one buyout firm has its finger on the pulse of the industry.

Health care-focused buyout firm MTS Health Investors recently completed a $175 million sale of one such company, Alere Medical Inc., to Boston-based TA Associates. Company management and existing investors, Flagship Ventures and Nevada Ventures, rolled over equity in the transaction. MTS Health Investors’ return on the deal wasn’t disclosed. The firm acquired Alere in 2005 in a deal that included a $5 million equity investment, according to the firm’s founder and Senior Managing Director Curtis Lane. At the time, Alere’s sales were about $60 million, and have since “grown nicely,” he said.

Reno, Nev.-based Alere provides home monitoring systems that transmit a person’s biometric data to call centers. The data is analyzed for warning signals for various ailments, such as heart failure or diabetic episodes. These services are of importance for insurers of people over the age of 65, for whom health care costs average four-times more than the under-65 crowd, Lane said.

The sale of Alere comes amid a whirlwind of activity for New York-based MTS Health Investors, which recently announced three new acquisitions alongside its strategic investment partner Oaktree Capital Management.

One was the $153 million agreement to acquire nearly half of Alliance Imaging Inc. (NYSE: AIQ), a provider of medical imaging services, from Kohlberg Kravis Roberts & Co. The other two joint deals include the formation of a specialty pharmaceutical distributor called Novis Pharmaceuticals and the add-on of home nursing services provider Synergy Inc. to the jointly owned Senior Home Care Inc. platform. —Ari Nathanson