LongueVue Capital (LVC) has acquired Zavation Medical Products. This is LongueVue’s fourth healthcare platform investment and the second medical device business it has acquired in the past 18 months.
Zavation designs, engineers, and manufactures a portfolio of spinal hardware used in thoracolumbar (the thoracic and lumbar regions of the spine), cervical, interbody fusion, and minimally invasive surgery. Other products include related medical instruments and micro-and-macro porous bone graft substitutes. Zavation’s products are sold through a network of more than 100 distributors in 35 states. Zavation, founded in 2010, has approximately 50 employees and operates a 24,000 square foot facility near Jackson in Flowood, MS (www.zavation.com).
Zavation has commercialized over 10 product families since its founding and has 10 additional products expected to launch over the next two years. “Zavation fits well within our investment strategy,” said Rick Rees, Founder and Managing Partner of LVC. “We love partnering with entrepreneur owned businesses at inflection points that have proven management teams willing to invest meaningfully alongside LVC. The company’s rapid growth is a testament to management’s ability to capitalize on compelling demographics and other industry tailwinds favoring smaller, more agile, and customer focused OEMs. Lastly, although we are geographically agnostic, it is always great to partner with entrepreneurs in our back yard, the Gulf South.”
LVC makes equity and debt investments in lower middle-market companies that have over $3 million of EBITDA and up to $150 million of annual revenue. Sectors of interest include business services, transportation and logistics, healthcare, energy services, and niche manufacturing. In March 2017, the firm held a final close of LongueVue Capital Partners III, LP. The new fund was oversubscribed and closed at its hard cap of $252 million. LVC was founded in 2001 and is based in New Orleans with additional offices in New York and Salt Lake City (www.lvcpartners.com).
“Zavation has demonstrated exceptional growth and is a perfect cornerstone to our expanding healthcare portfolio. This is our fourth healthcare platform investment and our third in the past 18 months,” said Principal Ryan Nagim. “Furthermore, we believe the company is at an inflection point and has the opportunity to become a market leader in the spinal implant sector, as management has shown an incredible ability to execute. We look forward to our partnership with Zavation’s management team and driving significant growth, both organically and through acquisitions of unique technologies.”
“The management team at Zavation chose LVC due to their entrepreneur-friendly investment approach to value creation and their knowledge and expertise in growing middle market companies at inflection points like ours,” said Jeffrey Johnson, President and CEO of Zavation. “LVC’s financial and operational resources will allow us to introduce new products, meet and exceed distributor and surgeon expectations, expand our market presence, and take market share at an even faster and more deliberate speed.”
Abacus Finance provided the senior debt financing to Zavation to support the transaction. Abacus provides cash flow senior financing to private equity-sponsored, lower-middle market companies that have EBITDA between $3 million and $15 million. Debt facilities can be as large as $60 million with a typical hold size ranging from $10 million to $30 million. Abacus is based in New York (www.abacusfinance.com).
Robert W. Baird & Co.’s healthcare team, led by Robert Andrews and Manish Gupta, served as the financial advisor to LVC on this transaction.
© 2017 Private Equity Professional | July 28, 2017
