KKR buys into VC-backed healthcare practice Therapy Brands, PSG reinvests

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Global private equity house KKR has agreed to pick up a majority stake in venture capital-backed healthcare practice management and electronic health record software specialist Therapy Brands.

Existing investor PSG will take part in the buyout alongside KKR as a minority shareholder, with Lightyear Capital, Oak HC/FT and Greater Sum Ventures exiting their investments.

Lightyear managing partner Mark Vasallo said Therapy Brands had more than tripled in size since it initially invested in 2018.

Therapy specialises in software for mental, behavioral, substance use recovery, applied behavior analysis and physical rehabilitation healthcare providers, which it says are underserved in terms of practice management needs.

KKR partner Max Lin said, “We are delighted to be backing Therapy Brands at a time when there is increasing recognition and social awareness about the importance of mental health.

“Therapy Brands has developed an impressive portfolio of best-in-class software tools and mission-critical solutions to help mental health providers modernize their practices..”

KKR is making its investment in Therapy Brands primarily from its Americas XII Fund, which it closed on $13.9bn in 2017.

Previous behavioural healthcare investments from the firm include Blue Sprig Pediatrics and BrightSpring Health Services, while KKR has also backed high-growth healthcare-related tech companies such as WebMD and Clarify Health.

William Blair and TripleTree are acting as financial advisors and Davis Polk & Wardwell LLP as legal advisor to Therapy Brands. Kirkland & Ellis LLP is serving as legal advisor to KKR.

AltAssets reported yesterday that KKR-backed mobile gaming business AppLovin Corp was eyeing a valuation of more than $30bn through an IPO.

The private equity major picked up a minority stake in AppLovin three years ago at a $2bn valuation, just a few months after a Chinese buyout firm saw its stake buy overruled by US authorities.

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