Avera Health has sold off Avera eCare, its telemedicine services unit, to private investment firm Aquiline Capital Partners for an undisclosed sum.
The deal is expected to close in the final quarter of 2021 and will see the group renamed to Avel eCare, according to Wednesday’s announcement.
Avel eCare will remain in its Sioux Falls, South Dakota headquarters and continue providing its services to the health system with no interruption to patients. The company did not disclose other terms of the deal.
“We are very proud that Avera’s innovation in the telehealth space created this nationally renowned telehealth company,” Bob Sutton, president and CEO of Avera Health, said in a statement. “During the pandemic, people nationwide recognized the value of telehealth, and telehealth grew in significance.
"The time is right for us to fulfill this piece of our strategic plan so Avel eCare can scale and help even more people. Avera will continue its tradition of being an innovator in the virtual care space well into the future. And, Avera will maintain a relationship with Avel eCare as a recipient of telemedicine services,” he said.
Avera Health built up its virtual capabilities over the course of nearly 30 years and began extending those services to external partners about a decade back. The newly sold unit currently consists of more than 230 employees and delivers telehealth services to over 600 sites across 32 states, according to Avel eCare CEO Deanna Larson.
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“We are proud of the team that pioneered this unique care model, cultivating thousands of clinician-to-clinician relationships in support of the bedside care teams. We are excited to be given the blessing of Avera’s founders, and the investment of Aquiline to build our program further and provide quality, compassionate care to even more individuals.”
Avel eCare’s offerings cover areas like behavioral health, correctional health, pharmacy, senior care and intensive care, to name a few. However, certain services such as virtual specialty consults will remain with Avera Health, according to the announcement.
Aquiline is based in New York and London. The firm had $6.4 billion in assets under management as of the end of the first quarter and boasts a portfolio of financial services and technology, business services and healthcare.
In a statement, Jeff Greenberg, the firm’s CEO and chairman, pointed to the growing telemedicine market and highlighted his group’s experience in executing corporate carve-outs and growing tech-enabled services.
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“We look forward to building on Avel eCare’s strengths and working closely with the management team to expand their services and enhance their offerings for clients around the country,” he said.
Avera Health, also based in Sioux Fall, owns 35 hospitals and serves communities in South Dakota, Minnesota, Iowa, Nebraska and North Dakota. Despite selling off its telemedicine unit, Sutton stressed that the system “remains focused on its goals to accelerate growth including digital health, geographic expansion and investments in its people.”
Virtual visits and other telehealth services have taken center stage over the course of the pandemic, leading corporate investors to pump record amounts of funding into the growing sector. However, advocates for the technology worry that these gains could be stunted should legal flexibilities ushered by the public health emergency not be extended on a permanent basis.