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GTCR to Buy Majority Stake in Lab Firm PathGroup from Pritzker

·2 min read

(Bloomberg) -- Private equity firm GTCR has agreed to buy a majority stake in laboratory services company PathGroup Holdings LLC from Pritzker Private Capital.

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The deal values Tennessee-based PathGroup at about $1.2 billion including debt, according to a person familiar with the matter, who asked not to be identified because the details were private.

The current management team, including Chief Executive Officer Ben Davis, will be reinvesting as part of the transaction while the Pritzker family investment firm and Vesey Street Capital Partners will retain a minority stake, according to a statement Friday confirming an earlier Bloomberg News report. Former Labcorp Chairman and CEO Dave King is joining PathGroup’s board as chairman, GTCR said in the statement.

A representative for Chicago-based GTCR declined to comment on the value of the deal.

PathGroup provides services including anatomic pathology, digital pathology, molecular diagnostic and clinical testing services, according to its website.

“Dr. Davis and the PathGroup team have done an incredible job of building PathGroup into a unique, scaled lab services business with outstanding clinical services,” said Sean Cunningham, managing director and co-head of health care at GTCR.

The Pritzker firm is led by Tony Pritzker, one of the heirs to the Hyatt Hotels Corp. fortune as well as a family civic legacy that includes his brother, who serves as Illinois governor and isn’t involved in the investment firm. The firm, which bought PathGroup in 2016, has backed the company with acquisitions, including SkinDX and Pathology Consultants.

Latham & Watkins provided legal counsel to GTCR, the people said. Bank of America Corp. and Nomura Holdings Inc. served as co-financial advisers and Kirkland & Ellis served as legal adviser to PathGroup.

(Updates with new PathGroup chairman in third paragraph.)

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