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The Healthcare Investor

Insights on Issues & Trends that Impact Investments in Healthcare & Life Science Businesses

Women in PE to Know: Lindsay Ting

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are continuing our series of profiling women leaders in private equity. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. We are pleased to feature Lindsay Ting of Trilantic North America. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

A View From the Top: Debbie Kalk of Reliable Medical

Posted in Healthcare Services Investing

Please see below for the latest installment of our interview series, A View From the Top. This series features interviews with C-suite leadership of private equity-backed portfolio companies. This installment features Debbie Kalk of Reliable Medical. To recommend a leader for a future interview, email Holly Buckley at hbuckley@mcguirewoods.com.

Q: What do you believe is the most significant current challenge to growing your business and what will be necessary to overcome it?

Debbie Kalk: The pandemic and resulting economic environment have created difficulties for many businesses, and we’ve been facing the same challenges. We have needed to make difficult strategic decisions and learned to navigate scenarios we never expected to face. Still, we are financially strong and have continued to invest in our team. We are confident in our ability to continue to grow and identify opportunities to partner with other companies that are attracted to the stability and leadership support that Reliable Medical provides.

Q: What positions or organizational structures did you wish you had implemented earlier to reach your goals?

DK: It became apparent after our first acquisition that we needed to hire key leadership to better support growth and expansion. I think we have done a good job layering leadership, improving operations and being careful and mindful about timing and change management as these changes have made sense for the business.

Growth with sensitivity to the importance of our culture has been the goal. The leadership positions we’ve added have focused around better supporting our people and vision as the company expands.

Q: What advice would you give if a family-run business is thinking about pursuing private equity but worried about the possibility of losing some of the family dynamics that contributed to its success?

DK: Partnering with the right investor is critical. You are looking for someone who understands your industry and shares your values. When I chose to partner with Seven Hills and Matt Pettit, it was because I felt strongly that our vision and core values were in alignment. We aim to grow, not just for the sake of growth but rather where it makes sense culturally. Seven Hills shares those values and encouraged this approach.

Reliable’s vision is not just client-centric, but people-centric. Our mission is to improve lives for the communities and clients we service and for the people on our team as they truly are family. It is possible to grow while maintaining your culture. This is largely attributable to having a financial partner that embraces your philosophy. Family and culture are the priority in my personal life, with family including my personal family and work family.

Q: What characteristics do you look for in administrative leaders within your organization?

DK: I gravitate toward forward thinkers or visionaries who can see the big picture and get excited about growth and opportunity but also have the right servant leadership approach in supporting the Reliable family. The best organizations are ever-evolving, so it is important that our leadership remain flexible and creative while embracing change and technology.

Q: What do you think is the key to retaining your talent?

DK: Authentically connecting, treating them well, investing in them and giving them the opportunity and tools to be successful. It is important for morale and loyalty that we focus on flexibility and work-life balance. We support their strengths and help them further develop. We care a lot about education and training and offer career path options that encourage them to pursue their passions.

About Debbie Kalk

Debbie Kalk joined Reliable Medical in 1998, bringing more than 20 years of experience in healthcare roles with companies including Merck. She originally was hired to document, train and facilitate OSHA compliance and obtain Joint Commission accreditation. In 2006, Kalk was promoted to executive manager, overseeing the management and leadership team as well as finance and billing. After serving as vice president, she assumed the role of CEO/president of Reliable Medical, overseeing the strategic direction and operations of the company with an eye on future trends and continued growth.

In 2019, Kalk was honored to be named one of four finalists for the “HME Woman of the Year.” Kalk currently serves on several boards, including National Coalition for Assistive and Rehab Technology, and works with CRT manufacturers and providers on legislation and patient advocacy. Across the home medical equipment industry, she is known for her forward thinking, operational excellence and extraordinary leadership skills.

Kalk is an empowering leader who believes in the change management philosophy of rewarding and recognizing the contributions of her team. She is committed to championing her employees and is proud to lead a company that has been voted a “Top Workplace in Minnesota” for the past six consecutive years. Kalk’s goal is to continue to drive profitable revenue and growth without compromising the quality of patient care and the culture that has made Reliable Medical an employer and provider of choice.

Healthcare & Life Sciences Private Equity Deal Tracker: Enhanced Healthcare Partners Invests in Hallmark Health Care Solutions

Posted in Healthcare Services Investing

Enhanced Healthcare Partners (EHP) has announced it has completed an investment in Hallmark Health Care Solutions.

Hallmark Health Care Solutions (HHCS), based in Hauppauge, N.Y., is a healthcare consulting and technology firm. The software-as-a-service (SaaS) company offers physician compensation and workforce management solutions for health systems, academic medical centers and physician groups.

EHP, with offices in New York and Salt Lake City, Utah, is a healthcare-focused private equity firm that makes minority and majority investments in founder and entrepreneur-led lower middle market companies. Founded in 2005, the firm seeks to invest in companies between $50 million and $250 million in enterprise value.

EHP indicated that its investment in HHCS will help advance the company’s research, development and strategic objectives.

Terms of the transaction were not disclosed.

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BPEA Raises More Than $350 Million for Fourth Healthcare Fund

Posted in Healthcare Services Investing

BPEA has announced it has closed its BPEA Strategic Healthcare fund with $352 million.

The new fund includes commitments from 16 organized labor groups and other institutional investors. BPEA stated the new fund — the firm’s fourth dedicated healthcare fund and tenth overall fund — will invest in private healthcare companies directly and through specialist healthcare private equity firms.

More specifically, the fund will target investments in healthcare services and healthcare information technology companies.

BPEA, based in Boston, is a private equity firm focused on small and lower middle market buyout and growth investing as well as customized investment solutions. The firm focuses on profitable U.S. businesses with enterprise values generally below $100 million and EBITDA between $1 million and $10 million, as well as fund managers that target similar opportunities with fund sizes generally below $300 million.

Healthcare & Life Sciences Private Equity Deal Tracker: Evolution Capital Partners Acquires Health Technologies

Posted in Healthcare Services Investing

Evolution Capital Partners has acquired Health Technologies, according to a news release.

Health Technologies, based in St. Louis, Mo., is a provider of consulting dietitians, menus and food-service software to long-term care communities, small acute care hospitals and other companies. Founded in 1994, the company states it provides services to more than 2,500 healthcare communities across 40 states.

Evolution Capital Partners, based in Cleveland, Ohio, is a small-business private equity firm that invests in growing micro-market companies generating at least $500,000 of EBITDA. Founded in 2005, Evolution seeks to invest between $3 million and $10 million in companies within the healthcare services and several other industries.

Terms of the acquisition were not disclosed.

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Healthcare & Life Sciences Private Equity Deal Tracker: Serent Capital Invests in Procurement Partners

Posted in Healthcare Services Investing

Serent Capital has completed a growth investment in Procurement Partners, according to a news release.

Procurement Partners, based in Brookfield, Wis., is a provider of procure-to-pay solutions for healthcare providers. Founded in 2010, the company states that it offers complete procurement automation, including budget tracking, order placement, order processing, shipping and receiving, invoice processing, general ledger entries and reporting capabilities.

Serent Capital, with offices in San Francisco and Austin, Texas, is a lower-middle market private equity firm focused on investing in high-growth service and technology businesses. Founded in 2008, the firm typically commits $10 million to $50 million in equity in an investment in companies generating revenue from $5 million to $100 million.

Procurement Partners represents the ninth investment in the healthcare market for Serent Capital.

Terms of the investment were not disclosed.

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Thomas H. Lee Partners Raises $900 Million for Automation-Focused Fund

Posted in Healthcare Services Investing

Thomas H. Lee Partners (THL) has announced it has closed its THL Automation Fund at $900 million.

THL indicated the fund will pursue equity investment opportunities that harness a range of technologies driving automation in healthcare and several other sectors.

THL, based in Boston, is a private equity firm investing in middle market growth companies in three sectors, including healthcare. Founded in 1974, the firm typically targets companies with enterprise values between $250 million and $2.5 billion.

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Healthcare & Life Sciences Private Equity Deal Tracker: Warburg Pincus and Great Hill Partners Invest in Quantum Health

Posted in Healthcare Services Investing

Warburg Pincus and Great Hill Partners have completed a growth investment in Quantum Health, according to a news release.

Quantum Health, based in Columns, Ohio, is a consumer healthcare navigation and care coordination company. Founded in 1999, the company states that its Real-Time Intercept model is designed to identify opportunities for early intervention in an employee’s healthcare journey.

Warburg Pincus, based in New York, is a global private equity firm focused on growth investing. Founded in 1966, the firm takes a long-term perspective and invests in businesses at all stages of development within healthcare and several other sectors.

Great Hill Partners, based in Boston, seeks to invest in middle market companies in several sectors, including healthcare technology. Founded in 1998, the firm typically invests $25 million to $200 million in equity in each investment, targeting companies with an enterprise value of $25 million to $500 million.

Great Hill previously invested in Quantum Health in 2017 and is the company’s current majority shareholder. The firm retains a significant stake in Quantum Health following the growth investment.

The news release indicates that the investment would go toward accelerating Quantum Health’s investment in its technology platform and service delivery capabilities.

Terms of the transaction were not disclosed.

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A View From the Top: Lauren Sclesky of VersiCare Group

Posted in Healthcare Services Investing

Please see below for the latest installment of our interview series, A View From the Top. This series features interviews with C-suite leadership of private equity-backed portfolio companies. This installment features Lauren Sclesky of VersiCare Group. To recommend a leader for a future interview, email Holly Buckley at hbuckley@mcguirewoods.com.

Q: What advice would you give to a founder CEO when evaluating potential partners?

Lauren Sclesky: Invest the time to evaluate whether you share the same vision and your core values and principles are mutually aligned. The foundation of an organization is built on core principles. Identifying a partner that has similar core principals is a precursor to building a healthy and thriving organization.

Business challenges are inevitable. A cohesive partnership will foster collaboration and trust in times of uncertainty and result in stronger outcomes. Included in this are the open conversations I would ensure you have about strategic goals, including liquidity expectations.

Q: What was the best advice you ever received about running a business successfully and who did it come from?

LS: The best advice I received about running a business was from my mentor and former partner. Early in my career, he suggested I join a leadership and peer advisory group with other business leaders and engage with a business coach to help improve performance and execution. I have been involved with several groups throughout my career and gained tremendous value from other leaders as we often faced similar challenges in our roles. I received candid advice and perspective that helped me identify and address my blind spots and supported my development as a business leader in an evolving organization. An abundance of the wisdom and business practices I use in my role today came from peer advisory groups.

Q: How do you ensure the platform’s organizational culture is appropriately conveyed to potential targets?

LS: At VersiCare, we are passionate about our culture. It is what sets us apart from our competition. Our discussions with potential targets start with us conveying our core purpose of “helping people succeed.” It is truly at the heart of everything we do.

VersiCare is a value-driven organization that has provided care for more than 20 years. This message is communicated throughout our discussions that tie back to our execution and vision strategy that focuses on accountability, alignment and results, with an emphasis on people. Our core ideologies and organizational culture are prevalent in many discussions, and our actions are aligned with our values throughout the diligence process.

It is equally important for us to identify strategic partnerships that have a foundation similar to our organizational values. To that point, we have stepped away from potential targets that, while having a strong business model, did not align with our organizational culture.

Q: What plans do you have to further grow your business internally and what will be necessary to implement these plans?

LS: VersiCare has positive brand momentum and continues to build a best-in-class platform despite challenges associated with COVID-19. We have engaged with various prospects and plan to complete several new partnerships in 2020. At the same time, we have onboarded several new team members despite working in a largely remote environment.

VersiCare’s strategic plan is to be a top provider of home- and community-based care in the central and southern United States through acquisitions and strategic partnerships. An essential strategic component is to find like-minded companies that share our vision. We can provide a unique and tailored solution to smaller agencies that have hit a growth peak and need capital and infrastructure to build their business.

VersiCare leads growth and expansion with our aforementioned core purpose of helping people succeed. We are recognized as one of Detroit’s “Best and Brightest Companies to Work For” over the past 12 years. Preserving the foundation of VersiCare’s culture is top of mind as we build out our footprint. We place significant value on company culture and believe it is an instrumental factor in the success of the organization.

Our key initiatives are focused on building an evolving infrastructure and scaling systems and resources to support growth. As our infrastructure has scaled, we are better positioned to offer existing clients new and expanded service offerings while providing best-in-class options for our employees.

Furthermore, the leadership team has developed an integration team to ensure seamless transitions with a tailored playbook that has a standard onboarding process that includes the roles and responsibilities for all functions. We approach each integration with communication and transparency, leading with a company kickoff meeting to infuse excitement and engage the team in the transition and the opportunities ahead.

We believe that by making sound investments in the VersiCare platform today, we are positioned to execute our organic and inorganic growth plans for years to come.

About Lauren Sclesky

Lauren Sclesky joined what is now  in 1996 as a staffing consultant and held multiple positions within the company, including branch manager, operations manager, vice president of operations and chief operations officer. Sclesky was named CEO in 2008. She created VersiCare Group through a management-led buyout of its predecessor company.

Prior to VersiCare, Sclesky built a best-in-class platform by developing strategies that supported long-term and short-term goals, assembling a cohesive team and positioning the company to raise outside capital. Since the creation of VersiCare Group, she has led a multistate expansion, expansion of her executive team, de novo growth, payor growth, a spin-out of a non-key division and inorganic growth.

Sclesky is a member of the Macomb County Provider Alliance (MCPA) and sits on its board as secretary. The goal of MCPA is to improve conditions as they relate to providing support to persons with disabilities. Sclesky is a continuous advocate for consumers’ rights and maintains an integral role and responsibility in promoting the significant duty that caregivers assume in the success of the community mental health system. Her advocacy includes educating the Michigan Department of Health and Human Services and local legislators on the financial supports needed to deliver successful programs and outcomes.

Sclesky enjoys and excels at coaching and training initiatives for new employees and customers on various human resource and professional business topics, including effective interviewing, emotional intelligence and conflict management. She earned an associate’s degree in advertising and a B.S. in business management, both from Northwood University.

To contact Lauren Sclesky, email lsclesky@versicaregroup.com.

Women in PE to Know: Beth Rahn

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are continuing our series of profiling women leaders in private equity. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. We are pleased to feature Beth Rahn of McNally Capital. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

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