PathGroup

PathGroup

Company Overview

Offers sophisticated diagnostic services covering all sub-specialties of clinical and anatomic pathology to hospitals and physicians located in the Southeast and lower Midwest.

Middle market private equity firm focused on companies in the business services, healthcare and education industries.

Situational Overview

One of the largest and most successful independent, physician owned and led anatomic pathology labs in the country.

The Company had great growth prospects, but multiple corporate entities and shareholders created ownership complexity and misaligned interests that made seizing these opportunities difficult.

Wanted a capital partner that would enable shareholders to achieve significant liquidity, help recruit a sales leader that could build a salesforce and provide capital to expand product offering and geographic footprint through acquisitions.

These objectives needed to be accomplished while remaining physician-led and retaining a meaningful majority ownership and voting control.

BCA believed these objectives could all be met conducting a comprehensive process.

BCA Strategy

Approached a broad group of healthcare-focused private equity firms.

Assisted management in preparing investment materials that fairly represented the Company’s improving operating performance, increasing predictable and highly visible cash flow, the margin enhancements achievable through scale and huge growth opportunity available by expanding molecular testing..

BCA received several highly attractive proposals that satisfied all of the objectives.

Transaction Result

PathGroup shareholders achieved over $100 million in liquidity while retaining majority ownership and voting control.

The recapitalization simplified the ownership structure, aligned shareholder interest, gave them a capital partner with which to grow and added a new employee stock option pool.

Shareholders had the flexibility to receive consideration in the form of cash, stock or any combination thereof.

Minority Recapitalization Led by
Undisclosed

“We chose BCA due to their successful track record, sound advice on alternative strategies and their commitment to work in a hands on fashion with our physician Board and shareholders. During a very challenging market environment, BCA met or exceeded all of our goals including valuation, liquidity for shareholders and continued majority ownership by our shareholders. They also followed through on their commitments to our shareholders with numerous face to face meetings throughout the process. We are very pleased with their performance and consider them valued partners and friends.”

Ben Davis, M.D.
CEO, Path Group, Inc.