medical supplies

New Mountain Exits Medical Specialties Distributors

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New Mountain Capital has agreed to sell Medical Specialties Distributors to McKesson Corporation at an enterprise valuation of $800 million.

Medical Specialty Distributors (MSD) is a provider of medical supplies, biomedical services, and technology services to the post-acute/non-hospital patient supply chain. MSD serves over 9,700 healthcare providers at over 11,000 sites nationwide, as well as servicing patients in the home through its Patient Home Direct program. The company was founded in 1982 and is headquartered south of Boston in Stoughton, MA (www.msdonline.com).

New Mountain acquired MSD in December 2013 and during the term of its ownership the company’s enterprise value approximately tripled driven by growth in revenue, earnings, and new products, as well as add-on acquisitions. MSD strengthen its leadership in the home infusion market and also expanded its presence in the post-acute sector, particularly within the long-term care, home health, and oncology segments. The company added or created over 400 jobs during New Mountain’s ownership, net of any job losses, and total employment more than doubled.

“We are proud of our successful partnership with MSD,” said Bert Notini, a Managing Director at New Mountain. “Over the last four years we have partnered with management to invest in new technology, execute strategic acquisitions, and implement strategic initiatives to accelerate MSD’s growth, and look forward to seeing MSD continue to thrive moving forward. This new partnership will create significant value for all MSD stakeholders and we are confident that MSD is well positioned to continue on its impressive trajectory with McKesson.”

“New Mountain has been an invaluable partner to us,” said Tom Burke, CEO of MSD. “We have enjoyed working with the New Mountain team, which has provided support, strategic guidance, and capital to help us rapidly expand across the post-acute care market. We’re very proud of what we were able to accomplish together, and look forward to building upon this momentum with McKesson.”

McKesson Corporation (NYSE: MCK) is healthcare company that distributes pharmaceuticals and provides health information technology, medical supplies, and care management tools. The company is headquartered in San Francisco and had revenues of $198 billion in 2017 (www.mckesson.com).

New Mountain is an industry generalist and seeks to acquire just three or four companies each year, typically in the $100 million to $1 billion enterprise value range, and generally invests $100 million to $500 million per transaction. In September 2017, New Mountain Capital held an oversubscribed final close of its fifth private equity fund, New Mountain Partners V LP. The new fund closed at its hard cap with just over $6.1 billion of capital commitments. The firm was founded in 1999 and is headquartered in New York (www.newmountaincapital.com).

Morgan Stanley & Co. is the financial advisor to Medical Specialties Distributors.

The transaction is expected to close by the end of September 2018.

© 2018 Private Equity Professional | April 27, 2018

Shore Capital Adds to Argentum Medical

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Argentum Medical, a portfolio company of Shore Capital Partners, has acquired the TheraBond family of products from Alliqua BioMedical. Total consideration on the transaction was $3.8 million with $3.3 million of cash paid at closing.

The TheraBond product line is based on a proprietary and patented manufacturing process where silver is bonded to the entire surface of all fibers of the wound dressing. When TheraBond products are placed on the wound, bioactive ionic silver is released in the dressing at a controlled rate, promoting an optimal wound healing environment. The TheraBond products include contact dressings, island dressings and wraps that are used in burn care, surgical site care, and wound care.

Argentum, a portfolio company of Shore Capital since January 2017, manufactures and sells wound care products that are used in a number of clinical applications including surgical wounds, burns, chronic wounds, IV catheter-related wounds, and for negative pressure wound therapy. The company’s core brand is Silverlon which uses a silver-plated nylon matrix that provides the antimicrobial properties of silver ions to the wound dressing. The company, led by CEO Raul Brizuela, was founded in 2001 and is headquartered near Chicago in Geneva, IL (www.silverlon.com).

“This is an important acquisition for Argentum, and is consistent with the strategy we developed when we partnered with Raul Brizuela and the management team at Argentum earlier this year,” said Don Pierce, a Partner of Shore Capital Partners and Chairman of the Board of Argentum. “This acquisition is an excellent fit with the broader strategy of building a leading platform serving the advanced wound care market. This product family will extend Argentum’s burn care penetration and increase the depth of its product portfolio.”

“Alliqua has done an excellent job establishing these products as reliable, high-quality solutions for treating burns and other advanced wound care applications, and we have enjoyed working with them on this transaction,” said Mr. Brizuela. “We are excited to add the TheraBond products to Argentum’s existing Silverlon silver plated nylon product portfolio, further strengthening our clinically proven and cost-effective offering for clinicians and patients in all advanced wound care settings.”

Shore Capital Partners invests in lower middle market healthcare related companies that have $5 million to $50 million of revenue and $1 million to $5 million of EBITDA. Shore targets equity commitments of $10 million to $15 million per platform.  Healthcare sectors of particular interest include behavioral health; healthcare staffing; infusion therapy; laboratory products & distribution; laboratory services; outpatient rehab therapy; urgent care; veterinary services; pharmaceutical services and contract research.  Shore was founded in 2009 and is based in Chicago (www.shorecp.com).

Alliqua BioMedical (NASDAQ: ALQA) is a publicly-traded medical products company headquartered in Yardley, PA (www.alliqua.com).

© 2017 Private Equity Professional | September 5, 2017

H.I.G. Acquires United States Medical Supply

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H.I.G. Capital has acquired United States Medical Supply, a direct-to-consumer mail-order medical supply business.

United States Medical Supply (US MED) provides medical supplies to patients suffering from chronic conditions, including diabetes, sleep and respiratory disorders, and urological conditions who need supplies daily.  Products include diabetic testing supplies, CPAP (continuous positive airway pressure) masks and machines, catheters, orthotics, and prescription medications. The company specializes in servicing patients covered by Medicare, Medicaid and private health insurance.  US MED is accredited by the Accreditation Commission for Healthcare.  The company was founded in 1996 by its CEO Zachary Schiffman and is headquartered just west of Miami in Doral, FL (www.us-med.com).

“We identified US MED as an industry leader with a proven track record, patient-centric model, efficient operating platform, and a talented metrics-driven management team,” said Camilo Horvilleur, Managing Director at H.I.G. Capital.  “We are excited to partner with Zachary and management to support their strategic growth plan, particularly by pursuing add-on acquisitions.”

“We are thrilled to partner with H.I.G. – they have a strong history of working with healthcare and founder-owned companies to accelerate growth and increase value to patients,” said Mr. Schiffman.

H.I.G. Capital specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing or service businesses. H.I.G. has more than $19 billion of capital under management. The firm was founded in 1993 and is based in Miami with additional offices in Atlanta, Boston, Chicago, Dallas, New York, San Francisco, London, Hamburg, Madrid, Milan, Paris, and Rio de Janeiro (www.higcapital.com).

2015 PEPD • Private Equity’s Leading News Magazine • 8-21-15

Riverside Partners Exits IPA

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IPA, a maker of automated scrub suit and linen dispensing equipment and a portfolio company of Riverside Partners, has been sold to Roper Industries. Riverside acquired IPA in May 2008.

IPA has developed the industry’s most complete linen automation platform to address the problems associated with surgical scrubs and linen usage in healthcare facilities. The company’s products are specifically designed to save facilities money on scrub and linen management by reducing losses, decreasing misuse, and minimizing inventories.  IPA’s platform products include scrubEx, the industry standard for eliminating scrub inventory management issues, and alEx, the industry’s first automated solution designed to address linen management issues in hospitals. The company’s products are installed in over 600 hospitals throughout North America. IPA was founded in 1995 and is headquartered northeast of Atlanta in Suwanee, GA (www.thinkipa.com).

Harris Williams & Co. (www.harriswilliams.com) acted as the exclusive advisor to IPA. The transaction was led by James Clark, Geoff Smith, Paul Hepper, and Brian Lawson of Harris Williams & Co.’s Healthcare & Life Sciences (HCLS) Group.

“IPA has generated consistent growth over the years and Roper Industries’ platform will allow the company to accelerate expansion into the underpenetrated hospital market,” said James Clark, managing director in Harris Williams’ HCLS Group. “This is the second time we’ve had the opportunity to work with IPA and we believe Roper will be a great partner for the company.”

Riverside Partners invests in established and growing middle market healthcare and technology-oriented companies that have revenues from $20 million to $200 million and EBITDA’s from $5 million to $25 million. Riverside Partners is currently investing its fifth fund, Riverside Partners Fund V, LP, with $561 million of capital commitments. The firm was founded in 1989 and is based in Boston (www.riversidepartners.com).

Roper Industries is a diversified technology company and is a constituent of the S&P 500, Fortune 1000, and the Russell 1000 indices. Roper provides engineered products and solutions for global niche markets, including software information networks, medical, water, energy, and transportation. Annual sales in 2013 were approximately $3.2 billion.  The company is headquartered in Sarasota, FL (www.roperind.com).

“IPA’s proprietary products and technologies provide a compelling value proposition to its hospital customers,” said Geoff Smith, director at Harris Williams & Co. “IPA’s solutions not only help to reduce costs, but also assist in infection prevention in acute care settings, a key focus in the new healthcare environment.”

2014 PEPD • Private Equity’s Leading News Magazine • 8-29-14