NEW YORK & MONUMENT, Colo. - Morgan Stanley (NYSE:MS) Capital Partners (WA:CPAP) (MSCP), the middle-market private equity team within Morgan Stanley Investment Management, has agreed to acquire Prescott's, a specialty provider of healthcare-focused clinical engineering services. The company, currently owned by Atlantic Street Capital, will continue to be led by CEO Brian Straeb post-acquisition.
Prescott's offers maintenance and repair services for medical equipment, as well as sales and rentals of refurbished equipment and parts. Their services cater to a range of critical surgical suite equipment, such as microscopes, infusion pumps, and patient monitors. The company operates across the United States and the UK, delivering solutions to health systems and outpatient facilities. Morgan Stanley, with its robust market capitalization of $207.36 billion and a Financial Health Score rated as 'FAIR' by InvestingPro, continues to demonstrate its strategic investment capabilities in healthcare services.
Steve Rodgers, Managing Director and Head of Healthcare Investing at MSCP, emphasized the importance of Prescott's services in maintaining continuity of care and preventing equipment downtime. This acquisition marks MSCP's fourth investment in the Healthcare Outsourced Services sector since 2019, demonstrating the firm's ongoing commitment to the healthcare industry.
Brian Straeb expressed enthusiasm for the new partnership with MSCP, citing their comprehensive understanding of the industry and proactive approach in engaging their operations team to explore multiple angles for value creation.
The transaction is expected to close subject to standard conditions. Dechert served as legal counsel, Alvarez and Marsal as operations advisor, and Cascadia Capital as financial advisor to MSCP. Prescott's and Atlantic Street Capital were advised by Kramer Levin for legal matters, with Harris Williams as the lead financial advisor and Houlihan Lokey (NYSE:HLI) also providing financial advice.
Prescott's, founded in 1984, has established itself as a leader in the repair and maintenance of healthcare medical equipment. The company aims to reduce equipment downtime and maintenance costs for healthcare providers.
Morgan Stanley Capital Partners, known for its equity investments in North American companies, targets business growth through organic and acquisition strategies, focusing on business and consumer, healthcare, and industrial services markets. The firm's parent company maintains a strong dividend profile, having raised its dividend for 11 consecutive years, with a current yield of 2.88%. For detailed analysis and additional insights, investors can access comprehensive Pro Research Reports available on InvestingPro, which covers over 1,400 US equities including Morgan Stanley.
The information for this article is based on a press release statement.
In other recent news, Morgan Stanley has experienced significant developments in its financial performance and market outlook. The company reported robust third-quarter earnings with revenues reaching $15.4 billion and a net income of $3 billion, exceeding analysts' expectations. This strong performance was driven by a 16% year-over-year increase in revenue, a significant rise in equity trading, and record wealth management revenue.
Several analyst firms have revised their outlook on Morgan Stanley. While BofA Securities and Evercore ISI raised their price targets, maintaining a Buy and Outperform rating respectively, HSBC (LON:HSBA) downgraded the stock to Hold, citing balanced risk-reward at the current market valuation. Citi also retained a Neutral stance, despite raising the price target, suggesting more attractive opportunities elsewhere in the market.
In terms of leadership, CEO Edward (Ted) Pick has been elected by the Board of Directors to take on the additional role of Chairman, starting January 1, 2025. The company's investment arm, Morgan Stanley Capital Partners, has agreed to sell Sila Services to Goldman Sachs (NYSE:GS) Alternatives' Private Equity business. Additionally, Morgan Stanley has secured a futures business license in China, marking its entry into the country's derivatives market. These are among the recent developments shaping Morgan Stanley's trajectory.
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