GTCR has entered into a partnership with David Snow, the former Chairman and Chief Executive Officer of Medco, to form Cedar Gate Technologies. The new company will focus on acquiring companies and products in the healthcare information technology (HCIT) industry as part of a strategy to build a market leading healthcare data and analytics company.
GTCR plans to invest up to $200 million of equity capital to support Cedar Gate Technologies. Mr. Snow will serve as the Chairman and Chief Executive Officer of Cedar Gate and plans to invest up to $20 million in the new venture. Cedar Gate is headquartered in Darien, CT.
Mr. Snow, a 34-year veteran of the healthcare industry, most recently served as the Chairman and Chief Executive Officer of Medco, one of the nation’s largest pharmacy benefit managers. He joined the company as Chairman and CEO in March 2003 prior to the spin-out of Medco by Merck. He served as CEO until the company’s sale to Express Scripts in 2012. During Mr. Snow’s tenure, Medco’s revenue grew from $34 billion to over $70 billion. Prior to joining Medco, Mr. Snow served as President and Chief Operating Officer at Empire BlueCross BlueShield. Throughout his career, he has served in executive leadership roles for various healthcare companies, including Oxford Health Plans, American International Healthcare and US HealthCare. He also co-founded and served as President and CEO of Managed Healthcare Systems, which was later renamed AmeriChoice.
“I am thrilled to have the opportunity to work with GTCR to build Cedar Gate Technologies into an industry leader in the healthcare data and analytics space,” said Mr. Snow. “The U.S. medical delivery system is undergoing a dramatic and difficult transformation from fee-for-service to risk-based reimbursement. Our goal is to enable these at-risk providers and employers to make the successful transition to risk-based reimbursement through powerful predictive and prescriptive analytic software, built specifically for the management of financial and clinical risk.”
“We are very excited to partner with Dave to build a leading company in the healthcare IT industry,” said GTCR Managing Director Dean Mihas. “Dave has an exceptional track record over his career, with diverse experience in multiple healthcare segments and a history of driving organic and M&A growth. Dave’s industry expertise, strategic vision and operational abilities make him an ideal partner as GTCR commits to building a platform in this rapidly evolving industry.”
GTCR pioneered the investment strategy of identifying and partnering with executives to acquire and build companies through a combination of acquisitions and internal growth. The firm currently has nearly $11 billion in assets under management. Since its inception in 1980, GTCR has invested more than $10 billion in over 200 companies. The firm is based in Chicago (www.gtcr.com).
“GTCR’s commitment to Dave and the formation of Cedar Gate is a reflection of our outlook for investing further capital in the HCIT industry,” said Sean Cunningham, Managing Director at GTCR. “We are actively seeking acquisitions and believe we are in a unique position to evaluate and pursue select assets in this highly fragmented and rapidly growing market.”
GTCR’s investment in Cedar Gate will be made from GTCR Fund XI, a private equity fund with $3.85 billion of limited partner capital commitments.
2014 PEPD • Private Equity’s Leading News Magazine • 8-15-14