MedEquity distinguishes itself from many private equity firms with its sector-specific focus. Our experienced team brings together a diverse set of healthcare investment, management backgrounds that enable us to identify attractive healthcare sub-sectors as well as prime investment targets within our sectors of interest.
Our refined investment approach has helped cultivate long-term relationships with many industry executives and financial institutions with whom we enjoy proprietary deal sourcing and favorable investment terms. Many of our prospects are privately-owned businesses seeking a transaction on a direct basis or outside of a formal process.
The structures through which patient care is delivered to patients are undergoing continuous evolution, driven by new payor-related strategies, advanced analytics, innovative technologies and therapies, patient preference, and learning-curve improvements.
Attractive investment opportunities will continue to be presented by businesses that anticipate the migration of capacity and demand to lower cost and more accessible settings as well as by the related shifts in reimbursement patterns that accompany them.
Specifically, MedEquity has had particular success in radiation oncology, urgent care, and specialty home infusion. These successes included both aggressive growth through acquisition as well as “same-store” organic growth strategies. Each of these successes were also benefitted by system cost and access advantages over care alternatives.
An example of our successes in the sector is OnCure Medical. OnCure was a provider of outpatient radiation therapy and operated oncology clinics in California and Florida. MedEquity’s co-founder, Jeff Ward, worked in business development in partnership with OnCure’s CEO to grow the company over 300% in just three years through acquisitions of free-standing centers and the addition of advanced treatment technologies.
Another example is AppleCare Immediate Care which operates urgent care centers in middle and South Georgia. The company prides itself in providing accessible, affordable healthcare to the rural populations of the region. Jeff Ward has served in several key capacities as AppleCare, including CEO, CFO, and Chairman. Jeff has led the growth from three centers to a dozen through de novo openings, hospital joint ventures, and tuck-in acquisitions.
Pharmaceuticals are becoming more complex and customized. Customized medications are on the rise, as are pharmacies who can handle the complexities of compounding, manufacturing and administration of these larger, often unstable molecules.
An example in the sector is our investment in PharmaLogic. PharmaLogic outsources nuclear pharmacy compounding for hospitals throughout the United States and Canada. MedEquity’s co-founder, Brandon Ingersoll, is currently the Operating Chairman and leads their business development efforts. He has helped grow the company from four pharmacies at the time of our investment to over 45 today. PharmaLogic is currently the largest independent radiopharmacy in North America.
Another of MedEquity’s attractive investments in the sector is Belmar Pharma Solutions. Belmar is a hormone health compounding pharmacy that has expanded its footprint from two locations in one state to five locations in four states in the last two years (including four 503A pharmacies and one 503B outsourcing facility) since our initial investment. Belmar is has quickly become the leading women’s hormone health pharmacy in the United States. Brandon Ingersoll has been the Operating Chairman since MedEquity’s initial investment in 2019.
The healthcare industry is characterized by complex and confusing interconnections among patients, physicians, provider institutions, payors, and producers, as well as a great variety of middlemen, sub-contractors, and regulators. For example, the provision of specialty pharmaceutical services requires coordination among hospital discharge planners, attending physicians, and drug suppliers for specialized nursing, expedited delivery, and payer pre-authorization. This complicated environment has necessitated a new class of distributor to meet these needs.
While we will rarely invest in a specific technology, product or compound, we proactively look for healthcare service or distribution opportunities that can capitalize on a broad technology trend or innovation.
For example, our investments in both our telepsychiatry company, Qler Solutions, and our radiation oncology company, OnCure Medical, were based on significant technology advancements that transformed and improved patient access, service, and care.
We have continued interest in broad, sustained technology changes that will present opportunities in traditional and novel service and distribution paradigms without exposure to technology-specific or obsolescence risk.
- For Platform Investments:
- Revenue: $5 million or greater
- EBITDA: $1 million to $10 million
- For Tuck-In Acquisitions:
- Revenue or EBITDA of any size
- Provider-based services
- Specialty Pharmacy
- Product companies with low technology risk
- Technology-enabled services
- Established, profitable businesses addressing market opportunities with high growth characteristics
- Steady cash flowing businesses with compelling downside protection
- Selective, proven economic models that are positioned to reach profitability in the near future
- Owned or controlled by a single or small group of entrepreneurs, founders, or families.
- $5 million to $30 million
- Preferred equity or blend of securities
- Control to significant minority positions
- Buyout or growth capital
- Organic growth
- Acquisition strategies or consolidation plays
- Recapitalizations (full or partial liquidity)