Private equity firm Warburg Pincus LLC said on Tuesday it had agreed to acquire a majority equity stake in CityMD, a privately held urgent care provider with a large presence in the New York metropolitan area.
The value of the deal was not disclosed, though sources said on condition of anonymity that the transaction values CityMD at around $600 million, including debt. Warburg Pincus and CityMD would not comment on the deal price.
CityMD's acquisition underscores the continued appetite among private equity firms for U.S. healthcare providers, even as congressional Republicans debate plans for overhauling the U.S. healthcare system by replacing the Affordable Care Act, popularly known as Obamacare.
Urgent care clinics such as CityMD may be somewhat insulated from any Republican efforts to restructure healthcare because their ability to take cash payments means that patients will likely continue to use them even if their health insurance is affected.
CityMD offers walk-in services for anything from colds and sprains to broken bones, at a fraction of the cost of an emergency room visit.
CityMD was founded in 2010 by Richard Park and other physicians as a single Manhattan practice. It has since expanded rapidly, partly thanks to its merger in 2013 with peer Premier Care. It now has nearly 68 U.S. locations, most of which are in the states of New York, New Jersey and Washington.
Park has said that his vision in creating CityMD was to bring to healthcare the same level of convenience and customer-focus as is typical in the retail sector.
"We see meaningful opportunities for CityMD's continued expansion, and look forward to partnering with Dr. Park and the company's management team in this next chapter of growth," said Warburg Pincus managing director In Seon Hwang.
CityMD will join Warburg Pincus' portfolio of healthcare companies, which includes Alignment Healthcare, ComplexCare Solutions and Evercare.
(Reporting by Carl O'Donnell and Greg Roumeliotis in New York; Editing by Tom Brown)