Capital One Financial Corp. moved to bolster its healthcare expertise and M&A advisory capabilities with its announced acquisition of TripleTree LLC, an investment banking advisory platform that serves healthcare companies.
TripleTree, which had $60.6 million in total assets at the time of the deal's announcement, will join Capital One Commercial Bank’s capital markets group but will continue to operate under the current TripleTree brand and maintain its offices in Minneapolis and New York.
Morningstar analyst Michael Miller noted Capital One's experience in the healthcare sector, and said the acquisition brings strategic advantages.
"There is a benefit to being able to offer commercial banking to investment banking clients, and offering commercial clients investment banking services," he said in an interview.
The acquisition is part of a plan to expand Capital One's advisory capabilities to all of its clients in a variety of sectors, including healthcare corporate finance; healthcare real estate; energy; and the technology, media and telecommunications sector, Darren Alcus, head of Capital One's corporate bank, said in an interview.
"We have some organic efforts that we have started internally, so we’re looking to expand the capability to provide advisory services to all of our clients and, over time, we hope to expand some of the sectors that we serve to service some of the other clients in other sectors," he said.
The deal marked the second whole-company acquisition announced by Capital One in October, following a nearly 20-month period in which the firm didn't make an acquisition.
Justin Roth, TripleTree's head of investment banking, will continue to lead the unit, and said in an interview that he expects the entire TripleTree team, which includes eight managing directors, to remain with the company after the deal closes.
Roth described TripleTree in an interview as a platform that aims to provide clients advice in M&A advisory, healthcare services, healthcare technology and the areas where those lines of businesses converge. He cited Capital One's deep reach in healthcare and said the two firms are "kindred spirits."
"Capital One could not be a better partner for our business," Roth said. "Cultural alignment was paramount as we really aligned on a partner that was best for TripleTree."
Alcus called the combination a "tremendously good fit," adding in an interview that Capital One's healthcare clients will have access to "really world-class financial advisory and M&A capabilities" as a result of the transaction.
Alcus said Capital One had been targeting a healthcare acquisition in advance of the TripleTree deal, adding that the healthcare sector's importance to the overall economy and society at large has been especially evident in the last 18 months during the COVID-19 pandemic.
"We’re attracted to TripleTree for their long history of serving their clients needs in M&A, providing quality advice. They have a tremendous brand and market reputation and we saw an opportunity to truly join forces and to collectively benefit our clients,” he added.
Alcus said that Capital One has provided more than $80 million in financing for healthcare companies in the last decade, and lends in more than 40 subsectors in the healthcare environment. He said the firm's executives were impressed that TripleTree has executed more than 70 healthcare transactions.