Fri, Sep 19, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Private Equity Strategies

Dealmakers Q&A: Waud Capital Merges Portfolio Companies Early On

Monday, August 26, 2013

By: Bailey McCann, Private Equity Strategies

Waud Capital Partners focuses on middle-market growth equity investments, buyouts, industry consolidations and recapitalizations. Since its founding in 1993, the firm has completed more than 150 investments across industries, and has approximately $1bn of capital under management.

The firm recently announced the merger of two of its portfolio companies - Adreima and Optimum Outcomes, marking the first time Waud has merged two of its own portfolio companies. The merger is also notable as it took place early on in the investment lifecycle, which means that Waud will continue to be involved with the new entity well into the future.

“We always thought that there was a possibility both companies could be merged, but it was never a specific plan,” explains David Neighbours, Partner at Waud Capital Partners, in an interview with Private Equity Strategies. “We found there was a great opportunity to combine services, and share customers between the two businesses in a way that would be beneficial for both companies and their customers.”

Adreima, is a national provider of clinically integrated revenue cycle services. Optimum Outcomes, is a national provider of patient-focused account resolution services. Both companies have a roughly similar target audience of 5-6,000 hospitals in the US. The companies focus on the revenue cycle of hospitals, providing services around eligibility and registration staffing; clinical audit and denial prevention; and receivables management and self-pay/bad debt account resolution.

Both companies have been serving their respective clients for a number of years, Adreima was founded in 1990, and Optimum has been in business for 25 years.

Waud itself is a generalist firm in terms of the portfolio companies it looks at, however, Neighbors notes that they have a significant health care group and will continue to pursue this industry. The firm typically invests $20-100m, as a controlling interest. From there, Waud looks at how it can best grow portfolio companies, in this case that growth came from being acutely aware of how two separate portfolio companies work together in the same industry.

“Over time, merging the two companies really started to become a natural thing to do as they both evolved and started working together,” Neighbours says. “This will allow us to expand services to customers, and entrench those services, making it harder for hospitals to switch vendors.”

“We are acutely aware that each touch point of a patient’s healthcare experience has the ability to influence that patient’s perception of the provider. With the full spectrum of services now offered by the combined company, we are even better positioned to ensure and facilitate a positive patient experience, from initial registration all the way through final account resolution,” says Robb Cass, President of Optimum Outcomes.

The combined company will maintain the Adreima name and will be headquartered in suburban Chicago. The new business will have 1,100 dedicated employees, including 200 specialized physicians, nurses and coders, serving 600 hospitals and providers across 36 states. Robert Willhelm, the current CEO of Adreima will be CEO of this iteration, and Robb Cass, current President of Optimum Outcomes, will lead the patient-focused account resolution division.

The new organization will continue to operate from seven regional locations (Phoenix, Raleigh, Jacksonville, Fort Lauderdale, Los Angeles, Birmingham and Bloomfield, New Jersey). The company’s bad debt division will continue to operate as Optimum Outcomes.

“This is the first time we’ve ever merged two companies we have invested in so we plan to spend the balance of 2013 focusing on integration. In 2014 we will look at ways to continue growth, potentially through new acquisition opportunities, this is still a long term investment for us,” Neighbours says.

Waud had a controlling interest in both companies before the merger, and will maintain a controlling interest in the merged entity. Debt financing for the merger was provided by BMO, Regions Bank, Capital One Bank and Bregal Sagemount.

 
This article was published in Opalesque's Private Equity Strategies our monthly research update on the global private equity landscape including all sectors and market caps.
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies
Private Equity Strategies


Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali