CVC Capital Partners aims to further develop R&D and improve health economics with its latest investment in Spectrum Medical, according to the firm’s managing partner and head of healthcare, Cathrin Petty.
The Luxembourg-headquartered firm announced the investment from CVC Capital Partners VIII last week. The deal values Spectrum at up to £1 billion.
Spectrum, based in Gloucester in the UK, develops high-performance medical technologies in the cardiac bypass and ICU sectors, and is focused on providing technologies that include quantum perfusion systems, quantum informatics and quantum sterile technologies.
Spectrum’s R&D pipeline is “strong” and CVC wants to keep investing behind it, Petty told PE Hub Europe. This includes investing to scale, and manufacturing new lines and products. Additional M&A, however, is not planned. “CVC have a strong track record in supporting companies with strong organic growth, helping accelerate the international expansion and product rollout rather than just focusing on M&A-led growth,” Petty said. The growth plan also includes accelerating Spectrum’s market strategy in the US, Europe and Asia by exploiting CVC’s network and footprint.
Spectrum’s impact on the overall health economy is “substantial”, Petty said. Technologies developed by the company decrease the amount of intervention required by ICU nurses, as they allow the patient to stay in a stable state. “In an environment where nursing labour is scarce, that becomes important,” she said. “From a hospital standpoint, patients recover faster, and have a lower risk of readmittance with complications.
“There’s a lower risk in terms of patients, comorbidities and recoveries because it’s got a clever piece of technology that reduces the risk of embolism.”
Healthcare is a resilient sector, but its requirements are increasing, with scarcity in supply and labour bringing challenges. However, these factors are driving deals in the sector, said Petty.
“Off the back of covid, we’ve seen an acceleration of demand for better technology and also a constraint in terms of the supply and labour,” she said. “As a consequence, we’ve seen an increased interest into the space and a lot of new entrants.”
CVC has been building out its healthcare portfolio and aims to cover the sector widely, from med-tech through to pharma services, as well as the provider sector, both acute and outsourced.
Petty described the last 30 years of the healthcare sector as an “oligopolistic” environment. When Spectrum sought to tackle the needs of critical care, however, it required a very different method. “The founders had come at this with a really innovative approach – redesigning this from the bottom up using aerospace engineering to create a new microfluidic system to create a modularised system,” she said. “That system can be used depending on the sort of size, availability and practices of the hospitals.”