Strategic Rationale Behind Novo Holdings' Exit from KabaFusion and Implications for Private Equity in the Home Infusion Sector

The recent exit of Novo Holdings from its investment in KabaFusion marks a pivotal moment in the home infusion sector, offering critical insights into private equity (PE) strategies and the sector's long-term growth potential. Novo's decision to divest KabaFusion—a leading U.S. provider of chronic and acute infusion therapies—to Nautic Partners in 2025 reflects a calculated alignment with market trends, operational success, and the evolving landscape of healthcare delivery. This transaction not only underscores the sector's resilience but also signals a shift in PE capital flows toward platforms capable of scaling in a rapidly consolidating industry.

Strategic Rationale for Novo Holdings' Exit

Novo Holdings acquired KabaFusion in 2022 with a clear mandate: to expand access to high-quality, cost-effective infusion therapies while maintaining a patient-first approach. Over three years, the company nearly doubled in size, acquiring key assets such as Coram Infusion Services and Lincare's infusion pharmacies, and expanding its footprint to 45 states. This growth was driven by KabaFusion's clinician-led management team, led by CEO Dr. Sohail Masood, which prioritized operational efficiency and clinical excellence.

Novo's exit, however, was not a retreat but a strategic realignment. The firm's leadership emphasized that KabaFusion had achieved its value-creation objectives, including geographic expansion, therapeutic diversification, and enhanced ambulatory care capabilities. By exiting to Nautic Partners—a PE firm with a 35-year track record in healthcare—Novo ensured continuity in KabaFusion's mission while unlocking new growth potential. This move aligns with Novo's broader philosophy of reinvesting returns into high-impact ventures, a hallmark of its ownership by the Novo Nordisk Foundation.

Home Infusion Market: A Goldmine for PE Investors

The home infusion sector is poised for robust growth, driven by demographic shifts, technological advancements, and a systemic push toward value-based care. According to recent projections, the home healthcare market is expected to grow at a compound annual growth rate (CAGR) of 6.51% from 2024 to 2030, reaching $513.10 billion by 2030. Within this, the therapeutic devices segment—including home infusion therapy—is forecasted to grow at an even faster rate of 7.36%, fueled by demand for dialysis and IV equipment, as well as the adoption of Internet of Medical Things (IoMT) technologies.

Private equity's interest in this sector is equally strong. In 2024, healthcare PE deal value reached $61.3 billion, with a 219% surge in investments in healthcare IT, including telehealth and AI-driven analytics. These technologies are critical for scaling home infusion services, enabling remote patient monitoring, and optimizing care delivery. For PE firms, the sector's appeal lies in its defensiveness—home infusion is a necessity for patients with chronic conditions—and its potential for operational improvements through consolidation and digital integration.

Nautic Partners: A Strategic Fit for KabaFusion

Nautic Partners' acquisition of KabaFusion for $2.2 billion—a valuation of approximately 20× EBITDA—highlights the firm's deep expertise in healthcare services and its ability to identify undervalued platforms. Nautic's track record includes successful investments in CarepathRx, AnewHealth, and VitalCaring Group, all of which align with the home infusion sector's growth drivers. The firm's strategy of combining operational rigor with clinical leadership is evident in its approach to KabaFusion, where the management team remains a significant investor and retains control of day-to-day operations.

Nautic's focus on value creation post-acquisition is particularly relevant. The firm has a history of leveraging technology to enhance workflow efficiency, such as integrating AI-driven analytics into medication management and remote monitoring systems. For KabaFusion, this means opportunities to expand its ambulatory infusion capabilities, optimize supply chains, and further reduce hospital readmissions—a key metric for payers and providers.

Implications for Future PE Activity

The Novo-Nautic transaction sets a precedent for PE activity in the home infusion sector. First, it validates the sector's resilience amid regulatory and reimbursement challenges. Second, it demonstrates that high valuations are achievable for platforms with strong clinical leadership and scalable infrastructure. Third, it signals a shift toward partnerships that prioritize long-term growth over short-term gains.

For investors, this suggests that PE firms with healthcare-specific expertise—like Nautic—will continue to outperform generalist funds. The ability to navigate complex reimbursement models, integrate technology, and maintain clinician buy-in will be critical. Additionally, the transaction underscores the importance of EBITDA multiples as a benchmark. At 20× EBITDA, KabaFusion's valuation reflects investor confidence in the sector's ability to sustain growth, even as broader market conditions fluctuate.

Investment Advice for the Home Infusion Sector

Given the sector's growth trajectory and PE interest, investors should consider the following:
1. Target Clinician-Led Platforms: Companies with strong clinical leadership, like KabaFusion, are better positioned to navigate regulatory and operational challenges.
2. Focus on Technology Integration: PE-backed firms that invest in IoMT, telehealth, and AI analytics will likely outperform peers.
3. Monitor Reimbursement Trends: Changes in Medicare and Medicaid reimbursement policies could impact margins, so due diligence on regulatory risks is essential.
4. Diversify Geographically: Firms with a national footprint, such as KabaFusion, are better equipped to scale and mitigate regional risks.

Conclusion

Novo Holdings' exit from KabaFusion is more than a transaction—it is a case study in strategic PE investing. By aligning with Nautic Partners, a firm with deep healthcare expertise and a proven growth strategy, KabaFusion is well-positioned to capitalize on the home infusion sector's expansion. For investors, the transaction highlights the sector's potential as a long-term value driver, provided they prioritize platforms with operational agility, technological innovation, and a patient-centric ethos. As the healthcare landscape continues to shift toward home-based care, the home infusion sector will remain a cornerstone of PE activity, offering both defensive returns and growth opportunities.