Happy Monday. Here’s what we’ve got today…

• A look at Massachusett’s new healthcare private equity legislation

• Plus, a busy day for biotech dealmaking as the J.P. Morgan Healthcare Conference gets underway

Targeting healthcare's "bad actors":

On Wednesday, Massachusetts Governor Maura Healey signed new legislation expanding regulatory oversight of healthcare private equity investments.

“We’ve seen bad actors exploit vulnerable hospitals and communities,” said Healey at the bill's signing. “We need to prevent that from happening again.”

The law broadens Massachusetts’ Health Policy Commission (HPC) material change notice requirements. Investors must now file for a range of transactions, including capacity expansions, changes in ownership or control, and sale-leasebacks, and the mandatory review threshold has been lowered. Previously, a "near majority" market share triggered additional review. Now, a "dominant" market share is enough.

New deals in the state can also be subject to an HPC Cost and Market Impact Review (CMIR) process.

As part of CMIR, the HPC can demand detailed capital structure information, ownership documentation, and five years of post-closing operational data. While the commission cannot block deals outright, its findings are public and may be referred to the attorney general.

The new law also mandates that "significant equity investors"—a definition that includes any private equity firm with a financial interest in a provider, provider organization, or MSO—participate in legislative hearings where they can be required to testify under oath regarding healthcare costs, staffing levels, and financial stability.

Firms must also disclose detailed compensation data, including base salaries, incentives, options, and deferred compensation for portfolio company executives.

House Bill 5159 caught some by surprise.

The legislation had stalled in the state assembly’s summer session before being brought back to life in a last-minute New Year’s Eve revival.

The Massachusetts bill was one of seven state measures proposed in 2024. Private funds industry groups successfully stalled six of those measures, failing to see off only an Indiana bill granting the state attorney general a review right for healthcare mergers.

What helped push Massachusetts over the line—and what initially spurred the bill in the first place—was public backlash over the fate of Steward Health Care.

Cerberus Capital Management bought the struggling system in 2010 and, with a series of add-ons, built it into the nation's largest private for-profit health system.

In 2014, Cerberus was criticized for closing a Steward hospital despite an earlier pledge not to do so for at least 10 years post-close. State officials also accuse the firm of refusing to report health system financial information as required by law, which they feel masked Steward's eventual descent into insolvency.

Cerberus began its exit in 2020 by selling a majority stake in the system to its physicians, financed with a seller’s note. After shuttering five more hospitals, Steward filed for bankruptcy in early 2024 amid "reports of mismanagement, unpaid vendors, and legally questionable practices," as told by Governor Healey.

Concerns over lapses in patient care had prompted daily monitoring visits from the state Department of Public Health, and Steward nurses testified to unsavory conditions, such as the storage of dead newborns in cardboard boxes when Steward failed to pay the vendor supplying proper bereavement equipment.

With the Chapter 11 filing four years after the firm’s majority exit, Cerberus maintains its investment "rescued and restored critical community hospitals" and says it had no knowledge of Steward’s performance after selling its controlling stake.

Even so, Cerberus has become a lightning rod for the debacle.

The most restrictive part of Massachusett’s new law is a prohibition on Department of Public Health licensure for new acute-care hospitals whose main campus is leased from a REIT — a response to Cerberus’ $1.25 billion sale-leaseback with Medical Properties Trust, which was blamed for saddling Steward with exorbitant rents that hastened its collapse.

• Johnson & Johnson (NYSE: JNJ) agreed to acquire Intra-Cellular Therapies (Nasdaq: ITCI), a biotech developing treatments for schizophrenia, bipolar depression, and other neurological disorders, for $14.6 billion.

• Verisure, a Hellman & Friedman-owned security systems provider, is preparing for a London or Amsterdam IPO that could value the company at up to €20 billion.

• Stroeer (ETR: SAX) has received indicative offers from sponsors, including KKR and Hellman & Friedman, for its out-of-home advertising and digital content businesses, which could be valued at around €4 billion, per Bloomberg.

• KKR is exploring the sale of UK waste management company Viridor, which could be valued at around £7 billion, and may launch a process later this year, per Bloomberg.

• Blackstone has hired Goldman Sachs and Jefferies to advise on exit options, including a sale or IPO, for mobile app marketing platform Liftoff, which could be valued at more than $4 billion, per Reuters.

• Clearwater Analytics (NYSE: CWAN) agreed to acquire Enfusion (NYSE: ENFN), a hedge fund and investment management SaaS platform, for $1.5 billion in cash and stock.

• PAG acquired a majority stake in Pravesha Industries, a pharmaceutical packaging manufacturer, at an enterprise value of $200 million.

• Consortium Brand Partners acquired a majority stake in Jonathan Adler, a home decor and furniture retailer, from GF Capital.

• Abu Dhabi Investment Authority and GIC acquired minority stakes in Pye-Barker Fire & Safety, a fire protection services provider with existing backing from Altas Partners and Leonard Green & Partners.

• AWP Safety, a portfolio company of Kohlberg & Company, acquired three regional traffic control companies: Site Barricades, based in Fort Worth, TX; Integrity Traffic, based in Sherwood, OR; and WS Barricade, based in Frederick, CO.

• T-Mobile US (NYSE: TMUS) agreed to acquire Vistar Media, a digital out-of-home adtech platform, for $600 million in cash.

• GSK agreed to acquire IDRx, a developer of rare cancer therapies, for $1 billion upfront plus $150 million in regulatory milestone payments.

• New Mountain Capital agreed to acquire Machinify, an AI-powered healthcare RCM platform.

• Eli Lilly (NYSE: LLY) agreed to acquire Scorpion Therapeutics' PI3Kalpha inhibitor program for up to $2.5 billion in cash, including upfront and milestone payments, while taking a minority stake in a new spinout that will retain Scorpion's non-PI3Kalpha pipeline assets.

• GTCR invested in life insurance brokerage Winged Keel.

• WindRose Health Investors invested in Civie, an AI-powered radiology solutions platform.

• Biogen (Nasdaq: BIIB) submitted an unsolicited proposal to acquire Sage Therapeutics (Nasdaq: SAGE), a biotech developing brain health medicines, for $7.22 per share.

• Bain Capital raised its takeover offer for Insignia Financial (ASX: IFL), an Australian wealth management firm, to A$2.9 billion, matching a competing bid from CC Capital Partners.

Tech, Vertical SaaS, & Misc. Enterprise

• Overhaul, a supply chain risk management platform, raised $55 million in equity funding led by Springcoast Partners, with participation from Edison Partners and Americo.

• Labviva, an AI procurement platform for life sciences, raised $25 million in Series B funding led by 53 Stations, with participation from Biospring Partners, B Capital Group, and Glasswing Ventures.

• Intelex Vision, a London-based real-time AI video surveillance startup, raised £5.6 million in Series A funding from Acurio Ventures, Adara Ventures, and Inveready.

Fintech

• nsave, a Swiss fintech providing offshore banking services for high-inflation countries, raised $18 million in Series A funding led by TQ Ventures, with participation from Sequoia Capital, Y Combinator, ACE Ventures, and Proton Foundation.

• Float Financial, a Canadian business finance platform, raised $70 million CAD in Series B funding led by Growth Equity at Goldman Sachs Alternatives, with participation from OMERS Ventures, FJ Labs, Teralys, and Garage Capital.

Healthcare

• Truveta, a health data and analytics platform, raised $320 million in Series C funding from Regeneron Pharmaceuticals, Illumina, and 17 US health systems, including Northwell Health and Trinity Health.

• Tune Therapeutics, an epigenome editing startup, raised $175 million in Series B funding co-led by New Enterprise Associates, Yosemite, Regeneron Ventures, and Hevolution Foundation, with participation from Hatteras Venture Partners and Pappas Capital.

• Cera, a UK-based home healthcare platform, raised $150 million in new funding led by BDT & MSD Partners and Schroders Capital, with participation from Earlymarket, Guinness Ventures, and DigitalHealth.

• Qventus, a provider of AI-based care automation software for health systems, raised $105 million in Series D funding led by KKR, with participation from Bessemer Venture Partners, Northwestern Medicine, HonorHealth, and Allina Health.

• Clear Labs, an automated sequencing platform for clinical diagnostics, raised $30 million in Series D funding from Counterpoint Global, Felicis, GV, HBM Genomics, Khosla Ventures, Menlo Ventures, Nimble Ventures, Redmile Group, Wing Venture Capital, and T. Rowe Price Associates.

• Hildred Capital Management raised $800 million for its third healthcare-focused lower middle market buyout fund.

• Medalist Partners is raising $750 million for its fourth credit fund focused on asset-based lending and structured credit.

• Andreessen Horowitz and Eli Lilly launched a $500 million Biotech Ecosystem Venture Fund, with Lilly providing all capital.

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