Linden Capital Partners has agreed to sell Solara Medical Supplies to publicly traded AdaptHealth.
Solara is a direct-to-patient distributor of diabetes therapy products including continuous glucose monitors and insulin pumps. The company, led by CEO Steve Foreman, was founded in 2002 and is headquartered in Chula Vista, California with additional offices in Michigan, Arizona, Texas, North Carolina, South Carolina, Alabama, Ohio, and Illinois.
“Under Linden’s ownership, our focus on the patient and building a scalable infrastructure allowed Solara to establish itself as a leader in serving diabetes patients and as a trusted partner to manufacturers and payors,” said Ron Labrum, chairman of Solara and an operating partner at Linden.
Linden acquired Solera in May 2018 and completed four add-on acquisitions with the buys of J.M.R. Medical, an Ohio-based direct-to-patient provider of diabetic testing supplies and other durable medical equipment such as lift chairs, wheelchairs, walkers, canes, and beds (September 2018); Huey’s Home Medical, an Illinois-based direct-to-patient provider of durable medical equipment and supplies (November 2018); Pal-Med, a South Carolina-based direct-to-patient provider of insulin pumps and diabetic testing supplies (December 2018); and Active Healthcare, a North Carolina-based direct-to-patient provider of continuous glucose monitors, insulin pumps and diabetes supplies (May 2020).
“Since our investment in Solara, Linden helped to implement a comprehensive value creation program that focused on human capital; process and enterprise resource planning; deploying a national salesforce; payor contracting; and add-on acquisitions. During our ownership, Solara’s patient census surged to over 45,000 while its employee base grew by over 60%,” said Brian Miller, a managing partner at Linden.
Simultaneous with its buy of Solara, AdaptHealth has agreed to acquire ActivStyle, a medical supply company specializing in incontinence products, from The Riverside Company (acquired by Riverside in 2006). ActivStyle is headquartered in Minnesota with branch locations in Iowa, Illinois, and Ohio.
“We are incredibly proud of the organization we have built at Solara, which is based upon an unwavering commitment to serve our patients,” said Steve Foreman, CEO of Solara, who will join the leadership team at AdaptHealth following the closing of the transaction. “We are excited about the capabilities that AdaptHealth will bring to Solara, which will further enhance our patient service.”
AdaptHealth (NASDAQ: AHCO) is a provider of home healthcare equipment and medical supplies including acute care medical equipment, oxygen and chronic therapy services, and other medical devices and supplies used for the treatment of chronically ill patients with diabetes, wounds, urological, ostomy and nutritional supply needs. AdaptHealth services more than 1.6 million patients annually through its network of 220 locations in 38 states.
Capital for the acquisitions of Solara and ActivStyle will come from a combination of debt and equity. AdaptHealth has committed financing from its existing lender group for an addition of $240 million to its existing term loan facility; and has received commitments for equity investments of $190 million from One Equity Partners, $35 million from Deerfield Management (an existing investor in AdaptHealth) and $62.5 million from the sellers of Solara, including Linden.
Chicago-based Linden is focused exclusively on leveraged buyouts in the healthcare and life science industries with a specific interest in medical products, specialty distribution, pharmaceutical, and services segments of healthcare. Linden’s strategy is based on three elements: healthcare and life science industry specialization; integrated private equity and operating expertise; and strategic relationships with large corporations. In May 2018, Linden closed its fourth private equity fund, Linden Capital Partners IV LP, at the hard cap of $1.5 billion.
“We appreciate the support of our investors in our latest fund and, despite these challenging times, are proud of our first exit for Fund IV,” said Tony Davis, president and managing partner of Linden.
Private Equity Professional | May 27, 2020