A leading home-based care provider with 34 offices that offer hospice, home health and private duty services in Alabama, Louisiana, Mississippi and Tennessee.
Encompass Health (NYSE: EHC) offers both facility-based and home-based patient care through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. Encompass’ national footprint spans 128 hospitals and 268 home health & hospice locations in 36 states and Puerto Rico.
Camellia had been a family-owned and operated business for over 40 years and had grown to become a regional leader with operations in four states.
With valuations in the sector improving, BCA was asked to evaluate strategic alternatives, which included selling all or parts of the Company in a 100% or majority sale.
Based on extensive valuation analysis, Camellia and BCA believed selling the entire Company would yield the greatest buyer interest and maximize shareholder value.
BCA designed a competitive process that included strategic and financial buyers and articulated Camellia’s unique market position of being a multi-state platform with three growing lines of business.
BCA created offering materials that highlighted the Company’s strong clinical and compliance record as well as its strategic position in difficult to penetrate CON states in the Southeast.
Camellia received several attractive offers from participants that wanted to truncate an intensely competitive process and go exclusive.
One buyer was granted limited exclusivity to complete a quality of earnings review and draft of a purchase agreement.
Camellia successfully completed its sale to Encompass Health, maximizing value for shareholders and creating a positive outcome for employees.
“Brentwood Capital Advisors has been a highly valued and trusted advisor to our company for many years, serving instrumental roles in arranging the capital that allowed us to grow and in this last transaction advising on the sale of our family’s business. We truly value the timely, sound and objective advice and the day-to-day involvement provided by BCA’s senior investment bankers throughout every step of our sale of process. BCA’s team did a great job designing and executing on a sale strategy that fostered competitive tension throughout the process and closing a transaction that resulted in the highest value for or our shareholders and best outcome for our employees and patients.”
- Abb Payne
CEO, Camellia Healthcare
A leading vision care practice management company providing support services to over 30 ophthalmologists, 16 clinics and three ambulatory surgery centers in the Las Vegas, Nevada market.
A private equity firm focused on investing in growth-oriented middle market companies. Gauge has a $500 million fund and is based in Southlake, TX.
In 2016, three ophthalmology practices that had been working together for over 20 years in an independent physician association (“IPA”), hired Bill Moore as their CEO to create the first vertically integrated MSO vision platform in the Southwest.
Nevada has a very difficult payer environment and unique laws that prohibit ophthalmologists and optometrists from employing one another within the same practice; however, MSOs are exempt from this restriction.
Due to its scale, market penetration and long history managing capitated payer contracts, CompEye generated significant interest from private equity firms who had successfully consolidated dental and dermatology practices.
During a highly competitive process, BCA successfully articulated the practices’ consolidated scale, low integration risk, full continuum of care and market-leading position in Las Vegas to generate intense investor interest among healthcare services-focused financial buyers with significant buy-and-build experience.
Used extensive financial analysis to justify pro forma EBITDA that included adjustments for ASC-related facility fees, normalized physician compensation and corporate synergies.
Completed a majority recapitalization with Gauge Capital Partners, achieving significant shareholder liquidity while retaining significant minority ownership, and adding a high quality partner with which to grow.
“BCA played a critical role in helping position the strong and continuously improving financial and operating results of the three practices, the attractive financial outlook associated with several recently signed large payer contracts and the practices’ strong longstanding market reputation. BCA conducted a highly competitive process that maximized shareholder value and found us the best partner with a shared vision for providing clinical excellence.”
- Bill Moore, CEO
CompEye
Contract manufacturer of nutritional and meal replacement bars for many of the largest food companies and brands in the U.S.
Largest independent bakery in the U.S. and a full-service contract manufacturer of high-quality snack food products and packaging.
SFFG’s predecessor company, Standard Candy Company was founded in 1901 as a regional confectioner and most famous for its iconic Goo Goo Clusters. In 1999, the Company expanded into contract manufacturing, producing meal replacement and sports nutrition bars for some of the leading consumer food product companies in the U.S.
Periodically, strategic and financial buyers have expressed interest in purchasing SFFG. In mid-2017, one of their main competitors, Hearthside Food Solutions (“Hearthside”) submitted an unsolicited offer. SFFG’s expertise in small run bar production and R&D were extremely attractive and complementary to Hearthside’s medium and large run production capabilities.
SFFG engaged BCA to evaluate and negotiate the offer to meet shareholder valuation expectations.
BCA positioned the Company as a scarce resource that would dramatically change the competitive landscape for the acquirer.
BCA presented a financial analysis that quantified synergies and a significant number of EBITDA adjustments. Additionally, BCA helped the Company receive pro forma consideration for a large, recently implemented contract.
As a result, the purchase price was ~24% higher than the initial offer.
BCA managed an efficient due diligence process bringing the transaction to a timely signing and closing at the same valuation as the restated LOI.
The transaction provided SFFG’s shareholders with 100% liquidity, while allowing management to retain ownership of its subsidiary business, Goo Goo Clusters.
“BCA played a critical role in positioning the forward-looking financial outlook associated with several recently signed large contracts. They spent countless hours preparing the analysis supporting these financial results, negotiating key business terms and working through several complicated transaction structural issues.”
- James W. Spradley, CEO
Standard Functional Foods Group
A leading workers’ compensation (“workers’ comp” or “WC”) RCM company that uses tech-enabled outsourced solutions to accelerate and maximize WC claims reimbursement for hospitals and other healthcare facilities.
Founded in 1984 and with offices in Cleveland and Atlanta, Primus is a growth-oriented private equity firm focused on investing in leading healthcare, software, and technology-enabled services companies.
Founded in 2000, EnableComp historically provided WC claim collection services to a limited number of hospitals in TN.
In 2009, Jim Lackey joined the company as Chief Executive Officer and began to focus on Day 1 outsourcing, upgrading and expanding management talent and revamping workflow tools.
With most of these milestones completed by 2013, EnableComp generated explosive growth, nearly tripling sales from 2013 – 2016 increasing the percentage of recurring revenue.
With early and institutional investors desiring liquidity, EnableComp engaged BCA in July 2016 to evaluate strategic alternatives.
BCA believed the Company would be valued on its 2017 projected financial performance and launched the process at the 2017 JPM Healthcare Conference.
A key part of the sales strategy was to position the Company as a technology-enabled processor of complex claims, greatly expanding its total addressable market beyond workers comp claims and demonstrating the ability to expand gross margins.
BCA was successfully able to articulate EnableComp’s market-leading position, sales pipeline, unique value proposition and recurring revenue model and provide the analytical support to base valuation on full-year 2017 expected results.
BCA ran a robust three-step process that took the two bidders through to the signing of the purchase agreement.
EnableComp completed a majority recap with Primus Capital that enabled shareholders to achieve significant liquidity while retaining a sizable stake and future upside.
This robust process resulted in a valuation that was ~70% above the range desired by the Board.
“Brentwood Capital, our exclusive investment banking advisor, played a critical role in managing, negotiating and closing a highly competitive process that exceeded all of the shareholders’ goals including maximizing value and finding the best partner. This represents my fifth closed transaction with BCA, and I continue to be impressed by their high-quality work and commitment to closing deals.”
- Jim Lackey, CEO
EnableComp
Leading provider of value-based analytics software that enables providers to identify irrational variations in physician behavior and implement plans to address the shift from volume- to value-based reimbursement.
Online provider of analytics, assessments and learning for the healthcare market. Portfolio company of Bertelsmann Education Group.
The shift to value-based reimbursement is putting hospitals under intense clinical and financial pressure to provide better and more cost-effective patient care.
WhiteCloud was formed in 2009 to build an analytics platform that could drive changes in physician behavior to improve the quality and lower the cost of patient care.
In 2011, WhiteCloud partnered with a forward thinking large local health system to implement and embrace its platform, which generated over $47 million in cost savings, representing over 3.0x ROI over 7 years.
With a commercially viable product that was beginning to experience increased demand, WhiteCloud wanted to find a growth equity partner but ultimately decided a sale of the Company better fit shareholders’ goals.
Design a highly targeted, sell-side process that focused predominantly on strategic buyers with significant marketing and sales channel organizations seeking to add groundbreaking new software solutions like WhiteCloud’s.
Performed extensive case study analytics to illustrate WhiteCloud’s proven, hard-dollar ROI and significant total addressable market opportunity.
Positioned the Company as a unique opportunity to acquire best-of-class, mission critical software in this newly emerging and large market.
WhiteCloud was sold to Relias Learning, who was looking to aggressively expand into the healthcare space and marry its learning and assessment tools with targeted analytics.
Relias submitted a pre-emptive bid that provided shareholders with 100% liquidity at an attractive valuation that was ~15% above BCA’s initial estimates and provided an opportunity to earn another 10% in consideration through performance incentives.
“Brentwood Capital played a major role in creating the marketing materials and structuring, negotiating and closing a transaction that exceeded shareholders’ expectations. BCA’s strong industry relationships and healthcare technology expertise generated a process that yielded the best outcome for shareholders.”
- Bob Lokken, CEO
WhiteCloud Analytics
IDS is the leading U.S. provider of inmate education systems. Through its secure, electronic hardware and software platform, IDS increases inmate access to educational and other digital content, which facilitates rehabilitation and reentry into society.
GTL leads in the fields of correctional technology and government payment services with visionary solutions and customized products that integrate seamlessly to deliver security, financial value, and ease of operation for its customers.
As a part of our government outsourcing practice, BCA identified IDS as an innovative correctional education company and had been discussing strategic alternatives with Dr. Turner Nashe for about a year.
IDS’ ability to incorporate best-of-breed learning management systems (“LMS”) and educational content in a single product made IDS a desirable education partner within the corrections industry for larger companies selling into this sector.
GTL, a major customer and partner of IDS, identified IDS as a potential acquisition target to aid their diversification strategy.
GTL submitted an unsolicited term sheet to IDS to purchase 100% of the company and have Dr. Turner Nashe oversee the educational content efforts of the combined operations.
BCA believed there was an opportunity to significantly improve GTL’s initial term sheet that undervalued the earnings potential of IDS given its robust pipeline and unique product offerings and recommended negotiating better terms.
BCA led negotiations that resulted in the execution of a significantly improved letter-of-intent. Specifically, enterprise value was increased 45%, cash-at-close rose 28% and the earn-out portion of the deal was reduced by 33%.
BCA managed the due diligence process and the transaction closed on the terms outlined in the greatly enhanced letter-of-intent.
The final valuation exceeded the initial direct offer by 45%. As importantly, the transaction enabled the owners to remain with the business under favorable employment terms and preserve Dr. Nashe’s interest in other entrepreneurial ventures.
“Brentwood Capital, our investment banking advisor, played a critical role in optimizing the terms of the deal and closing a transaction that was a great outcome for the IDS shareholders.”
- Dr. Turner Nashe Jr.
CEO, Innertainment Delivery Systems
A leading provider of comprehensive management and staffing services to emergency department and hospitalist programs throughout the U.S.
Brown Brothers Harriman (BBH) is a privately owned and managed financial services firm.
Since being formed in 2015, APP has been one of the fastest growing companies in the industry.
APP garnered the attention of many private equity groups; however, management believed it was too early to consider even a partial sale and would only evaluate offers that fully valued its newly signed contracts and its rapidly growing pipeline of new opportunities.
Brown Brothers Harriman Capital Partners (“BBH”), had recently participated unsuccessfully in an auction process for a similar business to APP. BBH remained keenly interested in the sector and approached BCA about the prospects for an investment.
BCA worked with BBH to develop a proposal that would satisfy management’s concerns regarding not receiving adequate value for its highly visible near-term growth prospects.
BCA performed comprehensive analysis to quantify and justify a number of add-backs and their impact to pro-forma EBITDA.
In addition, BCA developed a mechanism that enabled APP to receive full value for the EBITDA of a target being acquired at a lower multiple and future contracts that would be signed within 90 days post-closing.
BCA played a critical role in the comprehensive diligence process and helping document an extremely complex transaction.
Shareholders received significant liquidity at closing and additional consideration based upon signing new contracts 90-day post-closing.
This innovative pro forma transaction structure allowed APP to receive full value in December 2016 for 2017’s results while still maintaining 50%+ ownership.
“Brentwood Capital played a critical role in structuring, negotiating and closing a transaction that exceeded our shareholders’ expectations for value, liquidity and for strategic opportunity going forward. They are trusted advisors whose expertise and commitment to success were key factors in successfully closing this transaction.”
- John Rutledge, CEO
American Physician Partners
Leading provider of behavioral healthcare services, focusing primarily on geriatric acute psychiatric care. The Company operates six acute psychiatric facilities in five states.
BBH Capital Partners (“BBH”) is an $802 million middle market private equity firm focused on investing in high-growth companies in the healthcare, technology, media and telecommunications, and business products and services industries.
Haven was a portfolio company of Thoma Cressey Equity Partners, Inc., predecessor firm to the well-respected healthcare investor, Cressey & Co., which purchased the Company in 2006. Cressey & Co. is currently investing out of its fifth fund and wanted to explore selling the Company in order to provide a return to its limited partners and fully liquidate this legacy fund.
A very experienced and proven management team was installed in late 2013 to improve operations and financial results and had achieved significant gains in census and profitability. With time and additional capital, BCA believed Haven could achieve the scale to take advantage of the significant facility-level and corporate infrastructure required to effectively treat this patient population and dramatically increase EBITDA.
Because of this profile, BCA believed that there would be equally strong interest among prospective strategic and financial buyers. Cressey & Co. engaged BCA to sell the business, and BCA conducted a highly targeted yet fulsome process.
BCA assisted management in preparing marketing materials that included detailed financial projections that demonstrated the significant increases in EBITDA that could be gained by increasing bed capacity at existing facilities and developing de novo locations within existing markets.
BCA positioned Haven as a large, turned-around platform with a deep, proven management team that had a realistic, capital-efficient growth plan that would leverage existing overhead and generate significant EBITDA within a two- to three-year period. This team and their plan generated strong interest from strategic and financial buyers.
Haven received several Letters of Intent and eventually chose to go exclusive with BBH.
BCA helped manage the diligence process, negotiated attractive terms for the sellers and closed the transaction within 60 days of going exclusive, with shareholders receiving 100% liquidity.
“Brentwood Capital Advisors helped us identify the best partner that shared our strategic vision. BCA’s strong industry relationships and behavioral healthcare expertise generated a process that yielded the best outcome for existing shareholders and the right partner for the Company going forward.
- Mike Lindley, CEO
Haven Behavioral Healthcare
After leading this and its predecessor Company for nearly twenty years, Ascend’s shareholders were seeking liquidity and a buyer that could continue its mission-driven focus.
The business consisted of 14 contracts that were awarded based on strong long-term relationships nurtured largely by the selling shareholders.
Over the last two years, Ascend had built the next layer of management, grooming a replacement CEO and transitioning key customers to its relationship management teams in anticipation of a transaction.
Prior to distributing the marketing materials, Ascend lost its first customer, a state that represented ~20.3% of EBITDA. Shareholders were concerned whether or not a sale at this time could meet their valuation goal.
BCA believed Ascend could still complete a successful transaction based upon the significant revenue and EBITDA associated with executed contracts that were scheduled to be implemented prior to closing any transaction. Based on this analysis, BCA recommended that Ascend begin the sale process.
Due to the niche nature of Ascend’s market, BCA recommended a highly focused process that targeted several strategic buyers, which would meet the sale’s financial and cultural objectives.
BCA successfully communicated Ascend’s market-leading position and presented extensive financial analysis demonstrating that signed contracts more than offset the loss of its major customer.
BCA also made successor leadership the focal point of all meetings with buyers, validating the successful management and customer relationship transition and ability to continue to grow the Company.
After evaluating several attractive offers, Ascend agreed to sell to MAXIMUS, which represented the best cultural, mission and financial alternative for shareholders.
BCA assisted Ascend’s shareholders in navigating and fulfilling a rigorous diligence process.
The transaction provided shareholders with 100% liquidity, and BCA was able to successfully structure an earn-out based upon the renewals of two important existing contracts.
“Brentwood Capital Advisors, our investment banker in this transaction, played a critical role in structuring a competitive process and closing a transaction that met all of the shareholders’ goals including maximizing value and finding the best partner for Ascend. BCA provided extensive guidance that was essential to the success of the transaction, and we would not have been able to complete this process without their support."
Teri Lepley
CEO, Ascend Management Innovations
Leading provider of testosterone replacement therapy that operates 45 Low T branded centers in 10 states and is headquartered in Southlake, Texas.
Leading regional provider of banking and financial solutions to commercial and consumer clients.
Low T has bootstrapped the development of its 26 Company-owned and 19 joint-venture clinics. Mike Sisk wanted to raise capital to accelerate growth and refinance existing debt without a personal guarantee.
The Company had grown rapidly, opening 51 de-novo centers in five years. Start-up losses from new units were masking the stronger performance and positive cash profile of maturing clinics.
BCA believed senior lenders would refinance existing debt and provide growth capital without a personal guarantee once presented comprehensive cohort analysis.
BCA believed that a competitive process and proper positioning of the industry would allow Low T to achieve all senior-level financing due to the Company’s strong and growing internally generated cash flow.
Due to the unique nature of the industry, BCA recommended conducting a broad process to achieve the most competitive debt financing and best partner.
BCA helped management prepare for a transaction by creating a clear, consolidating financial model and developing an effective confidential memorandum that highlighted the Company’s leading position in the market, strong underlying cash flow of maturing units and attractive future growth prospects.
BCA contacted a broad array of senior, asset-based and one-step-unitranche lenders.
After evaluating several alternatives, Low T selected Pinnacle Financial Partners as its financing partner.
Low T successfully secured a term loan to retire existing founder debt and a revolving line of credit to fund the development of additional de novo facilities.
The financing was achieved with improved pricing and covenants and included an accordion feature that allowed the facility to grow as the Company’s financial performance and cash flow increase.
“We are thrilled to have completed this growth financing with Pinnacle. This capital will allow us to continue our de novo expansion strategy across the U.S. Brentwood Capital was instrumental in developing our financing strategy, preparing the offering materials that effectively articulated the opportunity and growth potential of the business and running a competitive process that enabled us to obtain the most competitive funding and the right partner."
Mike Sisk
CEO, Low T Center
A leading provider of comprehensive management and staffing services for emergency departments and hospitalist programs throughout the Southeast and Southwest.
Lends and invests Goldman Sachs’ capital through stand-alone first-lien, second-lien, uni-tranche and junior capital investments directly to mid-sized companies across the United States and Canada.
An executive management team with extensive hospital management experience wanted to build an outsourced emergency department and hospitalist staffing company through acquisitions.
APP identified and was able to sign letters of intent (LOIs) with two physician-led staffing companies and wanted to raise the capital required to complete the purchase that would maximize their ownership.
For several months, management explored financing through their own existing relationships, finding all alternatives too costly. This time-consuming process was not only unsuccessful but was also jeopardizing the exclusivity provisions of the LOIs.
APP approached BCA to determine if the company had other options to secure acquisition financing that would allow management to maximize ownership and that could be closed quickly.
BCA believed that APP could finance the transactions exclusively through debt that would require minimal equity ownership.
Due to the pro-forma cash flow generated by the acquisitions and newly signed contracts, BCA recommended evaluating debt financing alternatives to accomplish management’s goals.
BCA assisted management in preparing lender materials that highlighted the cost synergies associated with combining the two companies, the pro-forma effect of newly executed contracts and the robust pipeline being developed using new management’s C-suite level hospital relationships.
BCA contacted a broad array of senior, unitranche and mezzanine lenders.
After evaluating alternatives, American Physician Partners selected Goldman Sachs Specialty Lending Group.
With BCA’s help, APP successfully acquired the two companies under letter of intent in less than 120 days and retained a significant majority stake in the business.
“Brentwood Capital Advisors, our investment banker in this transaction, played a critically important role in the formation of the Company by successfully obtaining acquisition financing along with the growth capital needed to execute our business plan while maximizing our physician partners and management’s ownership.”
- John Rutledge
CEO, American Physician Partners, LLC.
Leading provider of web-based revenue cycle management (“RCM”) software that enables hospitals to increase revenue, accelerate reimbursement and improve employee efficiency.
Leading provider of comprehensive healthcare information systems to rural community and critical access hospitals. Portfolio company of Francisco Partners.
Rycan’s sole shareholder wanted to sell to a buyer that was a cultural fit and could provide 100% liquidity and the ongoing capital and leadership to expand the Company’s footprint beyond its mostly Minnesota-based customers.
The passage of the Affordable Care Act created tremendous administrative and profitability pressures for critical access and rural hospitals in general and payer-specific reimbursement changes in Minnesota caused many providers in Rycan’s largest market to delay IT purchasing and implementation decisions.
Despite the delays in making IT capital spending decisions, demand for the Company’s leading, cash flow accelerating RCM software solutions remained strong and created significant pent-up demand.
BCA designed a sell-side process that preserved confidentiality while targeting predominantly strategic buyers seeking to either add software solutions like Rycan to their product lines to be sold through their salesforce or acquire customers.
BCA focused buyers on the potential for accelerated growth by highlighting Rycan’s historical success and the RCM product suite’s features and functionality, providing a robust analysis of the Company’s current pipeline that substantiated pent-up customer demand and frequently communicating new customer wins and improving financial results to prospective buyers.
After evaluating multiple purchase offers, Rycan opted to sell to Healthland, Inc., a portfolio company of Francisco Partners.
The shareholder received 100% liquidity.
“Brentwood Capital Advisors did extraordinary work for Rycan. I picked a great company to advise me in this process and could not be happier with the outcome. My only regret is not hiring them sooner.”
- Ryan Ellefson
CEO, Rycan Technologies, Inc.
Regionally-focused dental support organization (“DSO”) formed to acquire and develop pediatric and orthodontic dental practices.
Lower middle market private equity firm focused on investing in high-growth companies across a range of industries that include specialty manufacturing, consumer, healthcare and business services.
An executive management team with extensive dental management experience was interested in building a regional pediatric DSO platform through both acquisition and de novo development.
The Company’s strategy was to acquire under-managed practices in the Midsouth and Midwest and employ management’s proven techniques to improve clinical and operating results and to centralize all administrative tasks that could potentially take time away from patient care and reduce productivity.
Management had identified and signed letters of intent (“LOIs”) with four pediatric dental practices that shared their philosophy and needed capital to purchase these and other transactions in their development pipeline.
Management and BCA determined that the Company needed as much as $50 million in equity to fund its consolidation plan. The Company hired BCA to design and execute a process that would raise the required equity before the exclusivity period in the LOIs expired.
BCA prepared marketing materials and management presentations that clearly articulated management’s proven track record, unique clinical and operating strategy, differentiated specialty dental and geographic focus, and the opportunity to build one of the leading pediatric DSOs. These materials also highlighted specific areas for improvement within each practice under LOI and the related financial benefits.
BCA advised the Company to target healthcare services-focused private equity funds that had significant “buy and build” experience. The most interested firms were invited to attend management presentations before submitting LOIs.
Seven private equity firms attended management meetings, of which five submitted highly attractive LOIs.
After evaluating these alternatives and negotiating LOIs, management selected Huron Capital Partners. The deal was closed and funded in just under seven months.
The highly competitive process allowed management to own and earn significant equity in the Company and secure a great partner to provide the resources and capital to grow rapidly.
“Brentwood Capital Advisors played a critical role in this process. They helped us communicate the Company’s unique position in the under-served pediatric dental market; navigate the buyer universe; and negotiate the best terms for our management team. We are pleased with the result and greatly value our relationship with the Brentwood team."
Michael Schwartz
CEO, Spring & Sprout
North American leader in campus-based and online post-graduate clinical dental education that enables doctors to diagnose and develop a comprehensive treatment plan and to improve case acceptance and clinical skills.
Middle market private equity firm focused exclusively on companies in the medical products, specialty distribution, specialty pharmaceuticals, diagnostics, and services segments of healthcare.
Six shareholders had widely varying operational involvement and liquidity.
Existing operating agreement and governance had created cumbersome decision-making process.
Management wanted an investment partner that had significant dental industry experience and the expertise to accelerate existing and develop new growth initiatives.
Shareholders were open to considering either a minority or majority investment provided that they could retain meaningful ownership and remain in operational control of the business.
BCA performed significant analysis of the Company’s financials and customer data.
Positively positioned the Company’s transition from a campus-based to subscription-based model, emphasizing the growth opportunity of the expanding recurring revenue model.
Articulated the Company’s evolution from an almost entirely campus-based education and revenue model to one that incorporated a rapidly growing remote learning, subscription-based, recurring revenue component.
Also successfully communicated each shareholder’s previous and desired future role in the Company, which resulted in a seamless management transition at close.
Designed an intensely competitive process that targeted solely financial investors with significant experience and success either directly in the dental industry or in other businesses with similar characteristics. Shareholders selected Linden as its investment partner, who was the lead investor in two successful dental deals.
Valuation exceeded the top end of management’s expectations.
Management was able to retain significant ownership in the Company.
Transaction met all shareholder liquidity needs.
“Brentwood Capital Advisors, our investment banking advisor in this transaction, conducted a highly-competitive process that resulted in a great outcome for existing shareholders and the right partner for the Company going forward. BCA played a critical role in preparing us to go to market and in the success of the process. We could not be happier with the result and look forward to working with the Brentwood team again.”
Frank Spear
Spear Education LLC
Provides a fully-integrated, front-end revenue cycle solution that enables health providers to collect patient financial responsibility portion of the cost of the procedure at the point of service.
Delivers revenue cycle and related business solutions for healthcare professionals.
Shareholders had been in the Company for ten years and some shareholders wanted liquidity.
Had recently completed restructuring initiatives including key management changes, complete redesign of the technology solution and extending contract lengths.
Scarcity of front-end revenue cycle solutions combined with industry dynamics driving higher patient self-pay created premium valuations within the sector.
Early shareholders desired liquidity and were interested in pursuing strategic alternatives including a majority recapitalization and full sale.
BCA targeted a select group of HCIT-focused private equity firms and strategic buyers
BCA assisted management in preparing investment materials that highlighted the company’s strong competitive position, scalable business model, recurring revenue and integrated SaaS technology offering.
After evaluating multiple alternatives, RevPoint opted to sell to Availity, one of the nation’s leading health information networks.
Shareholders achieved 100% of their valuation and liquidity objectives through a complete sale of the business.
Even through the transaction occurred at the higher end of the valuation expectations, BCA was able to successfully structure an earn-out that would provide an additional 10% in value if the Company met certain post-closing performance objectives.
“Brentwood Capital Advisors, our investment banking advisor, played an important role and conducted a highly-competitive process that generated a great outcome for RevPoint's shareholders. We have a very trusting relationship and benefitted enormously from Brentwood Capital Advisors' expertise and commitment to our success."
Hal Andrews
CEO RevPoint Health Technologies
Leading provider of integrated clinical EMR and management solutions for the growing physical, occupational and speech therapy markets.
Leader in software solutions for outpatient specialty care, serving wound care, urgent care, occupational medicine, employee health and workplace medicine facilities. Portfolio company of Spectrum Equity.
ReDoc was in the midst of a management, technology and financial performance transition. A new CEO had been brought in two years prior to migrate the Company’s technology and business model from license/maintenance to a more robust, cloud-based SaaS solution with greater recurring revenue.
New management had significantly improved financial performance, new customer wins and prospect pipeline visibility and had nearly completed its conversion to a SaaS-based solution.
The Board was planning to consider sale alternatives in another nine to twelve months when Spectrum Equity-backed Net Health, who was consolidating software vendors to outpatient specialty care providers, made an offer to buy the Company. The Board believed Net Health’s offer valued the Company based on its year-end projected results and signed a Letter of Intent.
Based upon BCA’s application software and healthcare expertise, knowledge of ReDoc and strong relationship and transaction history with Spectrum Equity, the Board engaged BCA to prepare and manage responses to diligence, advise on document negotiations and ensure that there was sufficient competitive tension to ensure the transaction closed on the price and terms outlined in the Letter of Intent.
Leveraged longstanding relationship with Spectrum Equity to evaluate the integrity of the offer and assess the likelihood of closing the transaction.
Analyzed the monthly recurring revenue, new customer wins and pipeline to build a comprehensive revenue waterfall to determine and present the amount of “go get” revenue required to substantiate the Company’s forward financial projections and Net Health’s valuation.
Guided shareholders through complex document negotiations and provided financial analysis in support of business issues.
ReDoc was acquired by Net Health at 100% of the valuation indicated in the original Letter of Intent.
Shareholders received 100% liquidity.
“Brentwood Capital Advisors, our investment banker, played an important role in negotiating, structuring and closing this transaction. We were impressed by Brentwood Capital’s expertise and thoughtfulness in positioning the Company’s strong market position in rehabilitation therapy software and in helping us navigate complex transaction document negotiations and the comprehensive diligence process.”
- Bill Southwick
CEO, ReDoc
Leading provider of services and engineered detention products, furnished and installed, in the United States and Canada.
Leading detention contractor; the security group includes the brands of Airteq®, Trentech®, and ECS® as well as facility maintenance and service operations. Portfolio company of The Gores Group.
As part of our technology-enabled and outsourced services practice, BCA had identified Cornerstone as an industry leader and had been meeting and discussing strategic alternatives with Mitch Claborn for about 18 months.
Norment, a portfolio company of the private equity fund The Gores Group, was put up for sale in the second half of 2013. However, this process stalled and did not yield a successful transaction.
Cornerstone and BCA saw an opportunity to build the industry leader by combining the two companies. BCA contacted the Gores Group directly and submitted a Letter of Intent that incorporated a very aggressive closing timeline and a mutually acceptable valuation.
Both companies were emerging from a cyclical trough in the detention construction industry, and Cornerstone was keenly interested in financing the acquisition of Norment while minimizing dilution.
BCA believed the transaction could be funded solely with debt.
Because of the limited time allowed by the seller to close the deal and the buyer’s desire to minimize dilution, BCA identified a handful of unitranche lenders that could provide all the financing and close rapidly.
BCA assisted management in preparing materials for lenders that highlighted the strategic value and significant cost synergies that could be achieved through this acquisition.
Cornerstone Detention Products acquired Norment Security Group at the valuation recommended by BCA and within a timeframe acceptable to the seller.
The acquisition combined the second and third largest players in the detention contracting industry to create the largest company in the industry.
The acquisition was funded entirely with debt, avoiding any shareholder ownership dilution.
“I want to thank each member of the Brentwood Capital Advisors team for all of your hard work and dedication through Cornerstone’s acquisition of Norment Security Group. As our financial advisor, Brentwood Capital Advisors helped us move quickly to take advantage of this opportunity and worked diligently to close the transaction under a tight timeline. The result of this transaction is a great outcome for Cornerstone and Norment, and we are excited about the future. Your firm is a first class organization!”
- Mitch Claborn
President & CEO, Cornerstone Detention Products
Provides software and tech-enabled solutions that help hospitals and health care providers improve business operations and secure payment for their services.
A growth equity firm, investing in businesses focused on the information economy.
Private equity firm focused on companies in the business services, consumer services, financial technology, healthcare, media, communications, and software industries.
Middle market private equity fund focused on companies in the business services, healthcare and education industries.
Initially, the Company was slow to scale and as a result consumed many rounds of capital with complex security features.
In order to provide shareholder liquidity and clear a myriad of preferences issues, Passport’s valuation needed to exceed $100 million.
Periodically, strategic buyers approached Passport about a possible combination. BCA believed it could conduct a limited process that included a small number of financial and strategic buyers and achieved partial liquidity at a valuation in excess of $100 million
Passport engaged BCA to approach a select number of potential acquisition targets.
Passport acquired Nebo Systems and secured the required debt financing to consummate the transaction, despite turbulence in the credit markets.
After 10 years, early stage investors desired full liquidity.
BCA conducted a similar, narrow process that included a limited number of financial and strategic buyers.
The second recapitalization satisfied all initial investor liquidity aims and enabled Passport to benefit from the acquisition of Nebo.
“We had a great experience working with the BCA team. The firm conducted a highly targeted process that led to a very attractive valuation and transaction for the Passport shareholders and secured new, high quality capital partners. BCA delivered on their promise of daily, senior-level attention. In addition, the BCA team showed excellent judgment, provided sound advice and were effective advocates throughout the process.“
-Jim Lackey
Chairman, Passport Health Communications
National provider of revenue cycle outsourcing solutions that address short-term accounts receivable issues and provide long-term outsourcing services for hospitals.
Leading investor in lower middle market companies, managing $500 million in capital.
Xtend has a proven management team that had previously built and sold a similar business to Perot Systems.
Management felt there was an opportunity to repeat success and reassembled the team to build a new industry leader, capitalizing on deeply entrenched relationships and a reputation for delivering the highest quality and most effective RCM services.
The founders wanted to achieve significant current liquidity while still retaining a substantial stake that would enable them to benefit from continued growth.
Shareholders were open to considering either a majority recap or a strategic sale.
Conducted a broad process that incorporated approximately 50 strategic and financial buyers.
BCA positioned this liquidity event as chance for the founders to broaden the ownership to the next generation of management leaders and key sales personnel in the company.
BCA provided extensive customer analysis that conveyed the depth and breadth of these relationships and their strong track record of consistently converting these clients from initially project-based into fully outsourced recurring revenue accounts.
After reviewing several bids, management selected WestView Capital as its financial partner.
Through a combination of debt and equity, WestView purchased 60% of the Company, enabling management to achieve significant liquidity while retaining a substantial stake and operating control in the Company.
“BCA effectively communicated Xtend’s story and value proposition to potential investors, resulting in a very attractive valuation. We were pleasantly surprised that every member of the BCA team participated in every meeting and conference call. The senior attention, responsiveness and professionalism of the team were critical elements in successfully closing the transaction and achieving our valuation and other key objectives. We enjoyed working with the BCA team and look forward to working with them in the future..”
- Tom O’Neil
CEO, Xtend Healthcare LLC
Develops and manages comprehensive advanced wound care and hyperbaric treatment centers in collaboration with general, not-for-profit acute care hospitals.
Leading developer and manager of comprehensive wound care centers offering advanced treatment and hyperbaric oxygen therapy. Portfolio company of Sverica International.
Candescent needed to achieve greater scale in order to compete with its four largest competitors that were rapidly expanding their share of the market.
Candescent’s turnkey business model provided a superior value proposition to hospitals but was very capital intensive.
Candescent was capital constrained and needed to either find a new capital partner to fund new unit growth or sell to a competitor.
Positioned Candescent as uniquely situated to treat the growing obesity and diabetes epidemic and its resulting wound care needs.
Highlighted and contrasted Candescent’s turnkey, low capital intensity opportunity to not-for-profit hospitals to build new revenue streams with the more costly models of other wound care service competitors.
Emphasized the powerful, differentiated unit economic benefits of Candescent’s business model vis-à-vis competitors, along with its superior customer retention and predictable cash collection characteristics.
Effectively communicated to the top four industry participants that this was the last chance to either change or solidify their competitive position in the wound care market.
Candescent was acquired by RestorixHealth, Inc., one of the top four providers of wound care management services in the United States.
Shareholders received 100% liquidity.
“Brentwood Capital Advisors, our investment banker, played a critical role in structuring, negotiating and closing a transaction that exceeded our valuation objectives and provided the best partner to fund and accelerate growth.”
- Robert Nixon
CEO, Candescent Healing
Leading provider of home health care, hospice, and private duty nursing services based in Hattiesburg, MS, and providing services to Mississippi, Louisiana, Georgia, and Tennessee.
Leading regional provider of banking and financial solutions to commercial and consumer clients.
Camellia has grown rapidly organically and through acquisitions.
The Company had outgrown its lender and needed to partner with a new capital source lender to take advantage of numerous acquisition opportunities.
Management wanted to consolidate certain outstanding debt facilities and simplify its capital structure.
Management did not have the experience or bandwidth to conduct a process that would successfully identify and close with a new financial partner and engaged BCA to assist in evaluating funding sources.
BCA believed Camellia could more than double the size of its existing credit facility, based on the Company’s strong financial performance and growth.
Assisted management in preparing a confidential memorandum that included pro-forma analysis that supported a larger credit facility.
As a result of a well-prepared confidential information memorandum and intensely competitive process, Camellia received a large number of highly attractive proposals.
Camellia completed a cash flow-based term loan and revolving credit facility led by Cadence Bank.
The financing allowed management to pursue potential acquisition opportunities and long-term growth strategies.
Camellia refinanced certain existing indebtedness as part of the transaction.
“We are excited to have a new funding partner and financing in place with Cadence Bank. We plan to continue our aggressive expansion plan and this facility will provide the capital to fund currently targeted and future acquisitions. We enjoyed working with Brentwood Capital and will work with them in the future. BCA did a great job finding the right partner and best deal for our Company.”
- Abb Payne
CEO, Camellia Healthcare
Leading provider of hospice services, serving 17 counties in northern Alabama with a primary focus on the Huntsville, Decatur and Muscle Shoals regions.
Portfolio company of leading healthcare investment group, Frazier Healthcare, providing home health and hospice services in Virginia and Alabama.
HNA had received numerous unsolicited calls from potential strategic buyers. Shareholders had explored these strategic alternatives on their own but with limited success.
Industry consolidation and reimbursement uncertainty motivated HNA shareholders to pursue a sale.
Based upon BCA’s healthcare services expertise and knowledge of and strong relationships with strategic hospice acquirers, the shareholders engaged BCA to identify and selectively contact a number of prospective buyers and ensure that there was sufficient competitive tension to close a transaction at an attractive price.
Assisted management in preparing investment materials that fairly represented the Company’s improving operating performance, increasing cash flow, cost synergy opportunities and forward revenue and earnings visibility.
Also effectively communicated and demonstrated management depth and talent at the operating level, ensuring that shareholders received full credit for compensation-related add-backs to EBITDA.
HNA was acquired by Abode Healthcare (“Abode”), a portfolio company of Frazier Healthcare.
Shareholders achieved 100% liquidity.
“Brentwood Capital Advisors’ experience and skills played a critical role in helping us identify and complete this transaction with Abode. We have enjoyed a long-term, trusting relationship with Brentwood Capital and are pleased with the outcome.”
- Jim Cunningham
Managing Member, HNA
A leading direct to consumer provider of urological supplies, marketing its products primarily through TV advertising.
A private equity firm specializing in investments in rapidly growing, small to middle market companies.
Early stage company looking to raise growth equity to fund increased TV advertising budget and boost sales.
MDC was initially funded by local angels investors and small funds that did not have the resources to continue funding the complete capital structure.
Seeking an institutional investor to provide growth capital and strategic guidance.
Periodically, the Company had explored raising capital itself but did not have the bandwidth or experience to successfully run a process that would attract institutional investors.
Based on our knowledge of the Company, BCA believed it could position the Company’s strong results and conduct a process that would attract investors. MDC engaged BCA.
Prepared a targeted list of potential investors comprised of venture capital and lower middle market private equity firms.
Assisted in preparing a presentation and financial model to effectively communicate the growth potential and predictable results that could be achieved through additional advertising investment.
The process yielded several attractive proposals that could be structured to work with the Company’s complex capital structure.
Medical Direct Club raised $5,000,000 in growth equity from Fulcrum Equity Partners.
The valuation achieved was in the range initially indicated by BCA.
“Brentwood Capital Advisors positioned Medical Direct Club perfectly in the market attracting attention from numerous national Institutional Investors and creating a positive competitive environment for investment in the company.
The resulting transaction has created a great relationship with our new investor and the company was able to double the business within one year of closing with accelerated growth forecasted. I thoroughly enjoyed working with Brentwood Capital Advisors.”
Brad C. Gulmi
CEO & Founder,
Medical Direct Club
Leading not-for-profit regional medical center based in Meridian, MS.
National specialty lender of senior debt financing solutions dedicated exclusively to middle-market companies in the healthcare industry.
Anderson had undergone significant changes and brought in an interim CFO to assist with managing its financial performance and liquidity position.
Recent acquisitions and delays in transitioning provider number negatively impacted liquidity.
HIS upgrade in late 2012 temporarily interrupted billing, creating some short-term liquidity issues.
New and interim management team needed an advisor to assist in obtaining a line of credit.
Advised Company to conduct a broad process to identify and partner with a new senior lender to refinance and expand its credit facility.
Assisted management in preparing a confidential memorandum and pro-forma analysis that more accurately reflected normal steady state operations.
Anderson completed a senior debt refinancing led by HFG.
Anderson refinanced existing indebtedness as part of the transaction.
"This financing from HFG will enable Anderson to continue to serve the Eastern Mississippi/Western Alabama region as its largest healthcare provider. We were pleased to work with Brentwood Capital who positioned Anderson with lenders and structured a competitive process that resulted in the right partner in Healthcare Finance Group."
-Ray Humphreys
CEO, Anderson Regional Medical Center
Leading provider of web-delivered decision support solutions to post-acute healthcare and insurance markets.
Leading investor in information and business services companies, managing over $20 billion in capital.
The Company had an industry leading technology that used historical data to determine the best and most cost effective treatment setting for seniors.
Although it had a great product, SeniorMetrix lacked the resources to build a salesforce and effectively scale the business.
Periodically, SeniorMetrix received inquires from potential financial investors and strategic buyers.
In addition, founders wanted liquidity in a premium valuation environment at existing capital gains rates.
Advised Company to pursue strategic buyers to meet needs for immediate liquidity and to broaden growth platform.
Assisted management in positioning the Company to articulate value proposition to prospective acquirers.
SeniorMetrix was acquired by NaviHealth, an affiliate of Welsh Carson.
NaviHealth provided optimum platform for continued growth of SeniorMetrix.
SeniorMetrix owners achieved liquidity at a highly favorable valuation, with retained opportunity for future upside.
“This transaction is a strong validation of the post-acute care management tools and systems that our team has developed, and we are enthusiastic about the opportunity provided by NaviHealth's comprehensive and unique platform. Brentwood Capital Advisors, our investment banking advisor, played a critically important role in structuring, negotiating and closing a transaction that met and exceeded the needs of our shareholders for liquidity and for strategic opportunity going forward. Brentwood Capital Advisors expertise and commitment to success was a key factor in closing this transaction."
- Rick Glanz
CEO, SeniorMetrix
Leading provider of SaaS-based specialty claims management solutions for RCM to over 1,000 providers, including over 500 hospitals.
Leading investor in lower middle market companies, managing $500 million in capital.
eSolutions had received numerous unsolicited calls from potential financial investors.
eSolutions was successfully bootstrapped by the founder, who had built a very valuable business over a 12-year period.
Shareholder wanted liquidity at favorable capital gains rates and was interested in exploring minority and majority investments, as well as a strategic sale.
Attractive industry dynamics were driving premium valuations by both financial and strategic buyers.
BCA believed that eSolutions could by valued based on forward revenue and EBITDA based upon its strong pipeline, recurring revenue and new business visibility.
Advised the Company to approach a broad group of HCIT-focused private equity funds and strategic buyers.
Assisted management in preparing information materials that fairly represented the Company’s improving operating performance, increasing cash flow and forward revenue and earnings visibility.
Analyzed monthly, quarterly and annual recurring revenue payments in order to convert revenue from a cash- to GAAP-basis and built a comprehensive revenue waterfall to determine and present the amount of “go get” revenue required to substantiate the Company’s forward financial projections.
eSolutions opted to sell a minority stake in the Company to WestView Capital Partners at a valuation at the top end of the range initially indicated by BCA.
The leveraged minority recapitalization enabled founders to achieve significant liquidity while still maintaining a substantial majority ownership position in the Company.
“We are very pleased to have worked with Brentwood Capital Advisors as our exclusive financial advisor. The result of their process exceeded our expectations and achieved all of our goals. We trust their advice and hope to continue our close relationship in the years ahead.”
- Bill Creach
CEO, eSolutions
Leading provider of clinical and cosmetic dermatology in the United States with 53 Company-owned clinics in two states.
Premier investor in middle market companies managing over $4.8 billion in capital.
Shareholders had successfully built the leading dermatology platform that owned and operated 53 clinics and provided administrative services to another 47 clinics.
Although there had been many successful institutionally-backed dental transactions, no private equity funds had experience with dermatology practice management business models.
BCA believed shareholders could achieve significant liquidity, retain a meaningful stake in the Company and get access to the capital needed to consolidate the industry through a recapitalization.
Advanced Dermatology had strong growth trends but was impacted by the economic slowdown and its disproportionate impact on Florida, the Company’s core market.
Assisted management in preparing investment materials that fairly represented the Company’s unique business model, benefits of existing and future scale and attractive growth opportunities.
Effectively positioned the Company as the dermatology analogy to numerous highly successful dental consolidations.
Positioned the Company as the leading dermatology practice management platform in the Southeast, with the scale and location density to negotiate favorable terms with payers and the opportunity for acquisition expansion.
Advanced Dermatology was recapitalized by the Audax Group at a valuation that exceeded the original guidance provided by BCA.
Advanced Dermatology’s founders sold a majority of their pre-transaction equity, but, through the use of leverage, will continue to own a significant stake of the Company.
“We are very pleased to have worked with Brentwood Capital on this important transaction. They are trusted advisors who played a critically important role and conducted a highly –competitive process that generated results that exceeded our expectations.”
- Dr. Matt Leavitt
CEO, Advanced Dermatology & Cosmetic Surgery
Group purchasing organization specializing in the long-term care industry.
Leading health care services company offering solutions to support the complex needs of the alternate site heath care provider.
A strategic buyer made an unsolicited offer to purchase 100% of the Company.
Although shareholders were interested in liquidity, the offer was below owners’ valuation objective. Shareholders also believed there was significant upside opportunity in the business and wanted to maintain a meaningful ownership stake.
The shareholders engaged BCA to conduct a competitive process that included strategic and financial buyers/investors that would consider majority and minority investments and a strategic sale.
Assisted management in preparing investment materials that fairly represented the Company’s growing customer base, strong same-member sales growth, industry-leading internally-develop business analytics tools, and its strategic relationships.
Positioned the Company as a leading specialty GPO serving the difficult-to-penetrate long-term care industry.
BCA proposed and negotiated a transaction structure that met all shareholder objectives. The transaction allowed shareholders to achieve significant liquidity in a majority sale while maintaining a meaningful stake in a standalone subsidiary that would be provided additional capital with which to consolidate the industry.
Navigator was sold to Managed Health Care Associates, Inc.
The final valuation exceeded the initial unsolicited direct offer by approximately 20%.
The shareholders received 100% liquidity, a portion of which was reinvested in the Company.
This transaction is a great outcome for our company, its management and its shareholders, and we are very excited to be joining a leading healthcare services company like MHA. Brentwood Capital Advisors, our investment banking advisor, played a critically important role in structuring, negotiating and closing a transaction that met and exceeded the varying needs of our shareholders, for liquidity and for ownership going forward. We benefitted enormously from Brentwood Capital Advisors expertise and commitment to success in this complex sale process.
- Mark Eaton
CEO, Navigator Group Purchasing, Inc.
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.
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.
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.
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.
“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.
A leading provider of enterprise software applications to community and specialty hospitals via a license/maintenance model. HMS was primarily owned by two founders and an ESOP, which limited ownership by current management.
Middle market, $275-million private equity fund focused on companies in the business services, healthcare and education industries.
HMS received an unsolicited offer from a financial buyer. BCA was asked to evaluate the bid and opined that the valuation was significantly below market based upon HMS’ strong market position and opportunity to improve profitability.
The founding and majority shareholders wanted liquidity but were not actively involved in day-to-day management and wanted no involvement or ownership post-closing.
BCA believed that a recapitalization would give a prospective financial buyer an opportunity to streamline governance by buying out the founders completely, reducing the ESOP’s stake and providing a stock option plan to incentivize current management, enabling them to build significant equity value and pay more for the Company today.
Because of the limited number of competitors serving HMS’ target market, conducting a process that maintained confidentiality without negatively impacting valuation was paramount.
Approached a small, highly-targeted group of private equity firms.
Assisted management in preparing investment materials that highlighted HMS’ strong market position, rapidly growing and actionable new business pipeline and opportunity for significant margin expansion with scale.
Received highly attractive bids from all the private equity funds participating in the process, including the firm that submitted the initial, unsolicited offer.
HMS completed a majority recapitalization led by Primus Capital.
Shareholders received a 40% premium to the initial unsolicited offer.
“We are a fast growing company with aggressive growth plans and had received inquiries from a number of interested parties. BCA conducted a highly targeted and competitive process that provided a new capital partner along with an attractive valuation and transaction for the HMS shareholders. BCA delivered senior-level attention and provided sound advice throughout the process.”
Tom Stephenson
CEO Healthcare Management Systems
Develops professional tax preparation software used to complete and electronically file income tax returns and apply for refund anticipation loans.
Middle market private equity firm focused on companies in the business services, healthcare and education industries.
Annually, largest competitor made offers to purchase the Company. Although the founders wanted liquidity, they were reluctant to sell to a strategic buyer because of the prospective impact to local employment.
Although the founders had made management transition plans by hiring a new CEO, he had no meaningful ownership in the Company
BCA believed that we could construct a narrowly marketed process strictly to select private equity firms that could provide significant initial liquidity, meaningful upside through limited rollover, preserve confidentiality and limit management distraction and create a significant option pool for current management.
Identified and approached a limited group of prospective financial buyers.
Assisted management in preparing investment materials that could be distributed to a wide range of funding sources that highlighted the opportunity for higher growth and profitability.
Helped UTS shareholders obtain definitive information on the range of liquidity that could be achieved through any combination of debt and equity investments.
UTS completed a majority recapitalization led by Primus Capital.
A combination of debt and equity enabled shareholders to achieve substantial liquidity while retaining significant minority ownership.
The new option pool incentivized and enabled current management to participate in the Company’s value creation.
“The BCA team exceeded our expectations, helping us anticipate and resolve the inevitable conflicts that occur with these types of deals. They were ready and able to handle the evolution of the sale from a technical standpoint while also helping reconcile the goals of the sellers, buyer, and management team. BCA went above and beyond what you'd expect to find with most firms and closed the deal.”
- Bill Anderson
CEO, Universal Tax Systems Inc
Operators of Medicare Advantage and commercial managed care healthcare plans in Tennessee, Texas, Alabama and Illinois.
Leading $3.85 billion, North American private equity fund specializing in healthcare, business services, financial services and technology.
Favorable legislative and associated reimbursement trends were enabling the Company to rapidly grow revenue and EBITDA.
The Company’s angel investors wanted to take advantage of current market conditions and achieve partial liquidity.
In order to allow investors to make more informed bids and take advantage of rising EBITDA, BCA recommended that investors be able to meet with management before submitting initial Indications of Interest.
Designed a lengthy bid process that allowed strategic and financial buyers to witness the dramatic ramp in EBITDA.
Assisted management in preparing a confidential information memorandum, management presentation, and financial forecast that fairly represented the Company’s improving operating performance and increasing cash flow.
Received bids from all strategic and financial buyers that were invited to the second round at values nearly double the range that BCA had pitched to shareholders.
Through a combination of debt and equity, HealthSpring shareholders achieved over $300 million in liquidity while retaining significant minority ownership in the Company.
Shareholders maximized valuation and had the flexibility to make individual elections of up to 100% of their ownership in cash or reinvested in stock.
“The BCA team handled a recapitalization of our company with the existing shareholders selling a portion of their equity to a private equity group. The valuation that was achieved during our engagement exceeded our expectations, and we found the BCA team to be a pleasure to work with. They did a great job and the transaction propelled us to a new level and we hope to see further progress from here.”
- Herb Fritch
CEO, Healthspring