Varsity Healthcare Partners has sold its majority interest in Forefront Dermatology to OMERS Private Equity. This sale represents the first realized exit for Varsity Healthcare Partners which was founded in October 2012 by David Alpern and Kenton Rosenberry.
Varsity Healthcare Partners (VHP) acquired a majority stake in Forefront, a provider of practice management services to dermatology clinics, in May 2014. Since acquiring Forefront, VHP has grown the business from 37 clinics with 42 board-certified dermatologists operating in three states, to 82 clinics with 90 board-certified dermatologists operating in 11 states.
“In partnership with Forefront’s management team, we aggressively and successfully grew the company while maintaining the core tenets of delivering exceptional patient care and establishing a terrific work environment for physicians,” said Kenton Rosenberry, a partner with VHP.
The sale to OMERS follows VHP’s and Forefront’s completion of the add-on acquisition of Premier Dermatology in November 2015. This acquisition provided an entry point into Illinois for Forefront Dermatology, filling a gap in the company’s Midwest footprint. Like Forefont, Premier Dermatology provides medical and surgical dermatology, cosmetic surgery, and a range of other aesthetic services and products. The company – based near Chicago in Crest Hill, IL – was considered to be one of the larger providers of dermatology services in Illinois.
According to VHP, Forefront Dermatology is one of the five largest dermatology practices in the United States and provides general, surgical and cosmetic dermatology services as well as laboratory services. The company’s network consists of 82 clinics across 11 states, including Wisconsin, Michigan, Indiana, Illinois, Iowa, Kentucky, Minnesota, Missouri, Ohio, Pennsylvania and Virginia. Forefront Dermatology is headquartered north of Milwaukee in Manitowoc, WI (www.forefrontdermatology.com).
Varsity Healthcare Partners is an investor in founder and/or entrepreneur owned companies that are active in the healthcare services sector and have from $5 million to $15 million of EBITDA. The firm has offices in Los Angeles and Stamford (www.varsityhealthcarepartners.com).
“We have enjoyed working closely with the VHP team over the past 18 months and building an industry-leading company in the dermatology sector,” said Dr. Kenneth Katz, founder and president of Forefront. “VHP’s domain expertise and commitment to the Forefront values has enabled us to surpass our growth objectives without sacrificing our culture and commitment to excellence.”
OMERS Private Equity, the buyer of Forefront Dermatology, manages the private equity activities of OMERS, one of Canada’s largest pension funds. The group’s investment strategy includes the active ownership of businesses in North America and Europe. Sectors of interest include manufacturing, financial and business services, industrial and consumer products, transportation, and technology. Investment sizes range from $100 million to $500 million. The firm is located in Toronto with offices in New York and London and has $6 billion of investments under management (www.omerspe.com).
New York-based investment bank Jefferies (www.jeffries.com) was the financial advisor to Forefront Dermatology and VHP, and Morgan, Lewis & Bockius (www.morganlewis.com) provided legal counsel.
© 2016 Private Equity Professional • 2-11-16
