PE Hub
Vestar invested in Nox Health to help you get a good night’s sleep
The investment fits Vestar’s strategy of improving health outcomes, lowering costs and enhancing patient experience.
By Aaron Weitzman
Published December 15, 2022
Vestar Capital Partners recently made a significant minority strategic growth investment in Nox Health, a one-stop, holistic solution helping to identify, address and resolve sleep issues across the globe.
PE Hub spoke with Michael Vaupen, managing director at the New York-based firm to talk about what enticed Vestar to the Atlanta-based sleep health company, how the deal making process went and the plans to grow and scale the asset.
Vaupen said that Vestar was attracted to Nox for several reasons, with the first being the market opportunity, as sleep health is a “large and substantially underserved market with durable growth drivers.”
“Second, Nox’s solutions are well-positioned against this attractive market backdrop,” he said. “The company has built a differentiated portfolio of proprietary medical device IP, advanced software and analytics, and technology-enabled care management solutions which support the delivery of sleep care across the continuum of providers, payers and patient populations.”
The investment is well-aligned to Vestar’s thematic focus of solutions that improve health outcomes, lower costs and enhance patient experience, according to Vaupen.
The firm also sees many tailwinds that will help this investment.
“Aging demographics, increasing awareness of sleep health and an ongoing shift towards home-based testing will drive steady growth and demand for sleep diagnostics globally,” said Vaupen. “In addition, there is a growing body of clinical evidence strongly linking poor sleep health with chronic disease conditions, including hypertension and diabetes. As US healthcare continues to shift towards value-based care, we believe plan sponsors and at-risk providers will continue to seek ways to lower costs and improve outcomes within their managed populations – sleep care is playing an increasingly important role.”
He also added that historically, sleep disorders have been significantly underdiagnosed and therapy compliance rates have been low due to a fragmented and uncoordinated patient experience in sleep care.
“Nox’s patient-centric approach to comprehensive sleep care management, leveraging virtual care and home testing technology, results in a more seamless patient experience and leads to demonstrably better health outcomes and lower costs,” he said.
He noted that the Nox management team has built a “solid foundational platform that has delivered consistent and impressive growth through the years,” and that the capital from Vestar will help accelerate a number of organic growth initiatives.
“Those include development of the company’s sleep diagnostic devices and technology, as well as commercial team expansion to drive further adoption of Nox’s value-based care management services within employers and health plans,” explained Vaupen. “We also see an opportunity to augment Nox’s solution offering through strategic acquisitions.”
Despite the challenging and choppy deal environment this year, Vaupen said that the firm continued to “pick spots and focus on opportunities where we can leverage Vestar’s deep network, relationships and prior investment experience to bring differentiated value-add to a growth thesis.”
“Nox met many of those characteristics which allowed us to ‘lean into’ getting a deal done,” he said.
