Dermatology

Riverside Invests in Dermatology Practice Company

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The Riverside Company has invested in The Dermatology Group, a dermatology focused physician practices management company.

The Dermatology Group (TDG) was founded in 1992 by New Jersey dermatologist Dr. Daniel Groisser. Today, the company has 16 company affiliated offices located throughout Northern and Central New Jersey. TDG is headquartered northeast of Newark in Verona, NJ (www.thedermatologygroup.com).

“It is challenging to run an independent dermatology practice because of the complicated managed care landscape and the burdensome electronic medical record and administrative requirements,” said Riverside Vice President John McKernan. “Providing dermatologists with an opportunity to consolidate back office accounting, contracting, IT, marketing, scheduling, and other services with TDG allows them to earn similar compensation while focusing more on patient care and less on administration.” Mr. McKernan is Riverside’s healthcare industry sector head.

According to Riverside, TDG is the largest dermatological provider of clinical, surgical, cosmetic, and dermatopathology (a subspecialty that studies skin diseases at a microscopic and molecular level) services in the region. Demand for dermatology services is growing, driven by the rising incidence of skin cancer and an aging population. Riverside expects to work with TDG management to increase the company’s scale and geographic reach through strategic add-on acquisitions and recruiting new doctors.

“TDG provides convenient access to dermatology services that benefits patients, payors, and referral sources,” said Riverside Managing Partner Loren Schlachet. “There is a severe shortage of dermatologists, and TDG’s 16 locations and 34 providers allow quick and convenient access to dermatology care.”

Working with Messrs. Schlachet and McKernan on the transaction for Riverside were Partner Joe Lee, Associate Jason Chang, Vice President Dan Haynes, and Finance Director Lynda Barr. Origination Principal Scott Gilbertson sourced the transaction for Riverside.

The Riverside Company invests in businesses valued at up to $300 million. Since its founding in 1988, Riverside has invested in more than 410 transactions. The firm’s international portfolio includes more than 80 companies. Riverside is headquartered in New York with additional offices in Atlanta, Chicago, Cleveland, Dallas, Los Angeles, San Francisco, and London (www.riversidecompany.com).

Brown Gibbons Lang & Company (www.bglco.com) was the financial advisor to The Dermatology Group.

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-11-16

Pharos Launches New Dermatology Platform

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Pharos Capital Group has acquired a controlling position in Dermatology and MedSpa, Inc. Pharos intends to grow the company by acquiring and consolidating other dermatology practices in the eastern United States.

Dermatology and MedSpa (DMS) is a provider of medical, surgical and cosmetic dermatology services across multiple locations in the Maryland/Washington, DC metropolitan areas. The company employs 11 board certified dermatologists and one board certified plastic surgeon. DMS does business as “The Dermatology Center” (www.dermskin.com).

To launch this platform, Pharos is partnering with Steve Straus, an experienced dermatology and skin care operating executive. Mr. Straus, who previously managed American Laser Skincare, will serve as Chief Executive Officer, and Dr. Roberta Palestine, The Dermatology Center’s founder, will serve as Chief Medical Officer while continuing to practice medicine.

“Pharos has identified dermatology as a key area of interest for investment, with attractive demographic trends and a growing opportunity to improve outcomes for both patients and payors,” said Bob Crants, Co-Founder and Managing Partner at Pharos. “Demand for dermatology services is outstripping supply, and we believe there is significant opportunity for consolidation in the sector. We are confident that this is the first of many dermatology investments for Pharos.”

The buy of DMS is the fourth portfolio investment from Pharos Fund III, following Pharos’ acquisition of behavioral health services provider Seaside Healthcare; Employee Benefit Solutions, a provider of healthcare cost containment services; and Motion PT, a provider of physical therapy and occupational therapy services.

Pharos Capital Group invests $25 million to $50 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 has offices in Dallas and Nashville (www.pharosfunds.com).

© 2016 PEPD • Private Equity’s Leading News Magazine • 1-6-16