The acquisition of Employee Benefit Solutions marks the second investment from Pharos Fund III, following Pharos’ acquisition of behavioral health services provider Seaside Healthcare this past January.
“Healthcare remains an important focus for Pharos, and we believe our experience with underserved markets and mid-sized businesses can help EBS take advantage of positive, ongoing trends,” said Bob Crants, Managing Partner at Pharos.
Employee Benefit Solutions (EBS) serves employer groups in almost every state in the continental US with a total customer base of over 30,000 employees, including 58,800 covered lives. EBS is best known for its primary product, the Difference Card, an employer-funded debit card programmed for reimbursement of approved out-of-pocket employee healthcare expenditures. The company has offices in White Plains, NY (headquarters); San Francisco, CA; and Chicago, IL (www.differencecard.com).
In connection with the transaction, Gregg Lehman, Ph.D. has been named as CEO of EBS. Dr. Lehman, a healthcare executive who formerly served as CEO of Gordian Health Solutions, a former Pharos portfolio company in the wellness industry, replaces EBS founder Paul Staubi. Dr. Lehman most recently served as CEO of cardio-respiratory medical device manufacturer MGC Diagnostics, and prior to that was CEO of population health management company Health Fitness Corporation. Mr. Staubi retains a minority stake in EBS and will serve on the company’s Board.
“It’s an exciting time for me to join and lead the company,” said Dr. Lehman. “EBS has a strong presence in the health benefit and employee wellness industry, and I look forward to building upon Paul’s great work.”
“With the implementation of the Affordable Care Act, controlling healthcare costs is a growing concern for many businesses and should further fuel the impressive growth EBS has achieved over the last six years,” said Joel Goldberg, Partner at Pharos.
Pharos Capital Group invests $10 million to $40 million in companies seeking later stage funding for internal growth, acquisitions, management buyouts or recapitalizations. The firm invests across many sectors but has a particular interest in healthcare and business services. Pharos Capital Group has offices in Dallas and Nashville (www.pharosfunds.com).
Duff & Phelps Securities served as financial advisor to Employee Benefit Solutions.
© 2014 PEPD • Private Equity’s Leading News Magazine • 5-21-14