Private equity firm Onex Corp. (TSX: OCX) acquired Hospital Physician Partners through its Schumacher Group subsidiary. The combined firms have a presence in 358 hospitals in 29 states.

The transaction, completed in partnership with HPP Founders Dr. David Schillinger and Jeffrey Schillinger, was funded by incremental debt and equity. Onex Partners IV invested $105 million and the balance of the equity was from other investors, including the management of HPP and Schumacher, and cash from Schumacher's balance sheet. Onex’s share of the investment as a limited partner in the fund was $30 million. Pro forma for the acquisition of HPP, Onex Partners IV has a 71% interest in Schumacher.

HPP is the fourth largest US provider of emergency and hospital medicine clinical staffing services, according to Onex.

 “We’ve always had tremendous respect for HPP. They’ve been our competitor for many years and we share their dedication to medical excellence,” said Schumacher CEO Rich D’Amaro. “We are excited to welcome the HPP team into the SG family and look forward to building on their solid reputation to ultimately benefit the millions of patients we serve in communities across the nation.”

HPP CEO Jeffrey Schillinger is now president at Schumacher.

“HPP and Schumacher Group are both rooted by innovative, patient-focused care, with a deep commitment to quality,” said Schillinger. “We look forward to this new chapter in our respective companies’ histories where we will complement – not compete – in today’s dynamically changing healthcare environment.”