Great Hill Partners has acquired PartsSource, a provider of software used to procure medical parts and supplies for hospitals, outpatient clinics, and physician offices. The sellers were Ray Dalton, the founder of PartsSource, Polaris Partners and Primus Capital.
PartsSource provides the medical equipment service industry with software that is used for the acquisition and life cycle management of medical repair parts. The company’s software products automate the procurement process from product sourcing to financial settlement, and incorporate analytics to optimize compliance, efficiency, cost and quality.
In addition to its procurement software, PartsSource has created and maintains the industry’s only online, fully integrated parts procurement marketplace. The company facilitates more than 1.5 million transactions annually by connecting thousands of suppliers and OEMs to over 3,300 hospitals worldwide. PartsSource, led by its President and Chief Executive Officer Dr. Philip Settimi, was founded in 2001 and is based near Cleveland in Aurora, OH (www.partssource.com).
“PartsSource’s e-commerce technology has disrupted a workflow that has historically been offline, allowing providers to maintain their facilities efficiently and more cost effectively,” said Mark Taber, a Managing Partner of Great Hill. “We are delighted to partner with Phil Settimi and the entire PartsSource team to help them continue to expand their market leadership.”
Great Hill invests from $25 million to $200 million of capital per transaction to finance the expansion, recapitalization or acquisition of growth companies in a range of sectors in business-to-business and business-to-consumer industries including software, financial and healthcare technology, digital media, e-commerce, and internet infrastructure. Typical transaction sizes range from $25 million to $500 million. In February 2017, Great Hill held a first and final closing of Great Hill Equity Partners VI, LP, at the hard cap of $1.5 billion. The firm was founded in 1998 and is based in Boston (www.greathillpartners.com).
“We believe PartsSource has tremendous growth potential as procurement teams within healthcare seek ways to digitize their workflows via a one-stop-shop for medical parts and supplies,” said Rafael Cofiño, a Partner with Great Hill.
PartsSource will join Great Hill Partners’ past and present portfolio of healthcare companies including Qualifacts, RxBenefits, PlanSource, Passport Health Communications (acquired by Experian for $850 million in November 2013), SterilMed (acquired by Johnson & Johnson in September 2011) and bSwift (acquired by Aetna for $400 million in November 2014). Additionally, Great Hill has experience in e-commerce and electronic marketplaces, including companies such as Wayfair, The Shade Store, Cliq Studios and Momondo (acquired by The Priceline Group for $550 million in February 2017).
“PartsSource has experienced rapid growth in recent years and has emerged as the leader in the medical supplies procurement space, empowering our customers to drive costs out of the healthcare delivery system while improving outcomes,” said Dr. Settimi. “We are pleased to collaborate with Great Hill, who will offer both the experience and resources to fully maximize the value of our healthcare solution, while maintaining our commitment to first-class customer service, innovation and quality.”
Robert W. Baird & Co. was the financial advisor to PartsSource.
© 2017 Private Equity Professional | May 25, 2017
