ClearLight Partners has entered into an agreement to sell The Outsource Group to Parallon Business Solutions. The transaction is expected to close by the end of this month.
The Outsource Group (TOG) provides revenue cycle management services to more than 160 hospital clients and physician practices across 38 states. Services include full business office outsourcing, insurance billing and follow up, third-party liability, primary and secondary bad debt collections, Medicaid eligibility, early out/self-pay, onsite financial counseling and physician billing and follow up. The company has annual revenues in excess of $100 million and is headquartered in St. Louis (www.theoutsourcegroup.com).
ClearLight initially invested in TOG in December 2004 in partnership with Chief Executive Michael DiMarco. During its term of ownership ClearLight grew the company organically and through a dozen add-on acquisitions. “We identified a trend towards hospitals outsourcing management of their revenue cycle and saw an opportunity to build TOG into a best-in-class provider,” said Patrick Haiz, a partner at ClearLight.
“It has been a pleasure working with ClearLight in growing TOG,” said Michael DiMarco. “Going forward, the company is well positioned to continue its strong growth as part of Parallon, providing excellent service to TOG’s existing clients as well as offering its revenue cycle services to HCA’s extensive network of hospitals and surgery centers.”
ClearLight Partners invests from $10 million to $50 million in US or Canadian based middle market companies with revenues from $20 million to $250 million and EBITDAs from $5 million to $25 million. Sectors of interest include specialty manufacturing and distribution; business services; and consumer products and services. The firm has $600 million of assets under management and is based in Newport Beach, CA (www.clearlightpartners.com).
“We are proud of our association with Michael DiMarco and the team at TOG, and of their accomplishments,” said Michael Kaye, Managing Partner of ClearLight. “Working with talented executives to execute against a well-defined investment thesis that includes strong organic growth as well as selective fold-in acquisitions is one of our preferred ways to build value. We think that Parallon will be an excellent new home for the company and are pleased to deliver an attractive return to ClearLight’s investors.”
Parallon is provider of business and operational services to hospitals, healthcare systems and non-acute care providers. Services include revenue cycle management; technology consulting; workforce management; group purchasing and supply chain management. The company is a wholly-owned subsidiary of HCA Holdings (NYSE: HCA). Parallon is based in Franklin, TN (www.parallon.net).
ClearLight was advised by Cain Brothers & Company, a healthcare investment bank with offices in New York, Chicago and San Francisco (www.cainbrothers.com).
© 2013 PEPD • Private Equity’s Leading News Magazine • 6-12-13
