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Table of Contents
The 2013 Healthcare M&A Conference Conference Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Speakers Industry Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Optimal Healthcare: A Point/Counterpoint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Innovation: Informatics and Analytics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Deals: The Regulatory Impact and Opportunities . . . . . . . . . . . . . . . . . . . . . . . 12 Outsourcing the Pharma and Device Industries . . . . . . . . . . . . . . . . . . . . . . . . 16 The Economics of Today’s Healthcare Deal . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Exhibitor Profiles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Committee Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 White Papers High-Value M&A in the Era of Health Reform . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Inside M&A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Taking the Pulse of the Affordable Care Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
years of Corporate Growth Leadership
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ONE-STOP ON STOP ONE-S S P FINANCING, F AN N REVOLVER, REVOL RE VOLVER, VER ER R, FIRST LIEN DEBT, DEBT T, SECOND LIEN LIE IEN N DEBT, DEBT DE DEB E T, T, MEZZANINE CO-INVESTMENT ME E ZA A NE DEBT, DE T,, EQUITY DEBT EQ E NVESTMENT HOLD OL O LD SIZE: SIZE: S E:: UP UP P TO TO TO O $150 MILLION LION ON WITH WIT TH THE TH E ABILITY A TY TO TY O UNDERWRITE UNDER U DE UND DE WRITE DER W TE T AND A D SYNDICATE SYND S DIC CA ATE UP ATE P TO T $250 $25 50 MILLION MI MIL MILL ILLIO IL LL LION your deal are the premier C Contact Co ctt us for fo orr you ur next ur xtt dea d eal a and a ds see ew why hy y we w ar re th he p he pr emier em er lender for middle-market healthcare companies. lend nd de d er fo orr m iddle-mark dd m ket ke k et health h thc hcare c hc co ompa pa p panie ani a nie es.. Greg Greg g Browne B owne Br e | Managing nag aging g ng Director, D rector Dir ect ect ctor t r, Healthcare to Healthcar Heal H alth lth lt hcarre hcar re Leveraged Le erag Levera L rage ed Finance Fina F inan nance e c NIYV^UL'Ă„M[OZ[YLL[Ă„UHUJL JVT c NIYV^ ^U UL'Ă„M[OZ[YLL[Ă„UHUJL JVT ^^^ Ă„M[OZ[YLL[Ă„UHUJL JVT ^^^ Ă„M[OZ[YLL[[Ă„ Ă„UHUJL JVT
Your Y our business is our focus. McDermott Will & Emery is honored to sponsor ACG Chicago’s Healthcare M&A Conference. McDermott is a leading international firm, with more than 90 full-time health lawyers representing organizations in every major sector of the health care industry on regulatory and business transaction issues. Our experience in health care mergers, acquisitions and affiliations is unsurpassed by any other law firm in the United States. With extensive knowledge of health care, our health lawyers pride themselves on providing health clients with creative business solutions in many capacities. Further, Further, our practice is recogniz recognized ed by the health industry industry.. Chambers USA 2013 named McDermott “Health T Team eam of the Year,” Year,” a distinction that has been received by the practice for the second time in four years, making us the only group to receive this honor twice. To To learn more, visit www.mwe.com/health.
www.mwe.com Boston Brussels Chicago Düsseldorf Frankfurt Frankfurt Houston London Los Angeles Miami Milan Munich New York York Orange County Paris Rome Seoul Silicon V Valley Washington, D.C. alley Washington, Strategic alliance with MWE China Law Offices (Shanghai) McDermott Will & Emery conducts its practice through separate legal entities in each of the countries where it has offices. This communication may be considered attorney advertising. Previous results are not a guarantee of future outcome.
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Power comes from being understood. When you trust the advice you’re getting, you know your next move is the right move. And when health care organizations are looking to control costs and improve operations, they turn to us to understand their needs. Our experienced M&A professionals thoroughly analyze and validate financial, operational and strategic assumptions to reveal opportunities and bring potential dangers to light. We can help structure the deal to ensure the successful integration of business operations, cultures and strategies, and maximize the value of your investment. To learn how McGladrey can help your organization, please contact John Schmidt or Pat Kitchen at 312.634.3400.
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Conference Agenda 12:00 - 1:00: Our Networking Lunch Join hundreds of your peers to build relationships and deal flow. 1:00 - 2:00:
Industry Perspectives Eric Hammelman, Vice President, Avalere Health and John Kelliher, Senior Managing Director, Marwood Group Tony Kong, Director, West Monroe Partners (Moderator)
2:00 - 3:00:
Optimal Healthcare: A Point/Counterpoint Hon. Bart Stupak, Partner, Venable and ACA co-author vs. Ted Dabrowski, Vice President, Illinois Policy Institute with Brian Scullion, MD, Managing Director, William Blair (Moderator)
3:00 - 3:15:
Networking Break Concurrent Breakouts
3:15 - 4:15:
Innovation: Informatics and Analytics Neil Borg, Managing Director, Ziegler David Epstein, Vice President, Care Coordination & Analytics Solutions Management, Allscripts Dr. Anil Jain, Senior Vice President & CMIO, Explorys, Inc. Scott Nicholson, Chief Data Scientist, Accretive Health with Tom Churchwell, CEO, ViMedicus (Moderator)
Deals: The Regulatory Impact and Opportunities Dan Hosler, Principal, Sterling Capital Partners Peter Magas, Principal, Beecken Petty O’Keefe & Company Bill McMaster, Director, Primus Capital Brian Fortune, President, Farragut Square Group (Moderator) 4:15 - 5:15:
Outsourcing the Pharma and Device Industries Jeff Bernstein, President & CEO, Elorac, Inc. Kyle Bradford, Managing Director, American Capital, Ltd. Benjamin Daverman, Vice President, GTCR Torsten Nilson, Vice President Business Development-Medical, Tekni-Plex International Inc. with Rusty Ray, Partner, 11TPartners, LLC (Moderator)
The Economics of Today’s Healthcare Deal Michael Karnes, CFO, Regent Surgical Health Brian Morfitt, Partner, Frazier Healthcare David Neighbours, Partner, Waud Capital Partners, L.L.C. Todd Van Horn, Principal, Linden Capital Partners with Geoff Ligibel, Director, Houlihan Lokey (Moderator) 5:15 - 7:30:
Cocktail Reception:
ACG Capital Connection Style featuring: Beecken Petty O'Keefe & Company • Chicago Growth Partners • Clearview Capital LLC • Corinthian Capital Group, LLC • The Edgewater Funds • Flexpoint Ford • Geneva Glen Capital • H.I.G. Capital • HCP & Company • Linden LLC • Linsalata Capital Partners • New Harbor Capital • Prairie Capital • The Pritzker Group • Riverside Partners • Sheridan Legacy Group • Shore Capital Partners • Sterling Partners • Svoboda Capital Partners ®
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Accretive Health is a proud sponsor of the ACG Chicago Healthcare M&A Conference
At Accretive Health, our mission is to help our healthcare clients strengthen their financial stability and deliver better care at a more affordable cost to the communities they serve, increasing healthcare access for all. For more information, visit: www.accretivehealth.com
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Speakers Industry Perspectives
Eric Hammelman Vice President Avalere Health
Speakers
Eric Hammelman, CFA, Vice President, provides data-driven analysis of the impact of payment policies on healthcare patterns. He helps clients across multiple sectors understand how data can better inform their business strategies, including responding to emerging trends such as medical homes and Accountable Care Organizations, or shaping new payment policies including payment bundles. He also provides economic forecasts to meet different needs, including company-specific revenue and cost trends, industry-level expectations, or Congressional Budget Office (CBO)-style legislative scores. Eric has experience working with a wide range of datasets to understand the best option for each particular assignment, including Medicare, Medicaid, commercial, or other survey-based data. He routinely develops methods for combining disparate sources of data to provide a more complete picture of the healthcare sector, and then works with other Avalere experts to interpret and incorporate the qualitative aspects of healthcare into the quantitative world of data. He has a special interest in provider payment, and is a regular speaker at provider conferences to discuss how payment reform may impact provider performance in the years to come. Prior to joining Avalere, Eric was an Associate Analyst with JPMorgan, where he analyzed healthcare service companies and provided investment advice to institutional investors. He built financial and industry models for hospitals, nursing homes, dialysis, hospice, ambulatory surgery centers, clinical labs, inpatient rehab, long-term acute care, and physician groups. He also analyzed payment policies for each of these areas, including Medicare, Medicaid, and private payers. Eric has a Bachelors of Music Performance from the University of Illinois at Urbana-Champaign. He also earned an M.B.A. from the Marshall School of Business (University of Southern California), as well as a Masters of Music Performance from the Mannes College of Music in New York, N.Y. Eric is a CFA charterholder.
Mr. Kelliher is responsible for managing the day-to-day work product of the firm’s Research Group. Prior to joining Marwood, Mr. Kelliher was a Vice President at Timmons and Company. Previous to that position, Mr. Kelliher served as Chief Counsel for the Committee on Ways and Means from 2001 to 2003. As Chief Counsel, he was responsible for managing the legislative process for the Committee. Mr. Kelliher acted as a primary advisor to Chairman Bill omas (RCA) on policy issues, political strategy, and procedural tactics. During his tenure at the Committee on Ways & Means, significant legislation was enacted including the Medicare Modernization Act of 2003. Mr. Kelliher has also worked as Counsel and Chief Counsel at the Committee on House Administration. Mr. Kelliher received his undergraduate degree from Princeton University and then served three years of active duty in the U.S. Army. He graduated from Boston University School of Law. He holds the FINRA Series 7, 65, 86 and 87
John Kelliher Senior Managing Director Marwood Group
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Speakers
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Industry Perspectives continued Tony Kong is a Director in West Monroe Partners’ Healthcare practice, based in the firm’s Seattle office. He has more than 20 years of experience in leadership roles across a range of industries, particularly focused on guiding healthcare organizations through transformational changes in response to shiing marketplace conditions and regulatory demands.
Tony Kong Director West Monroe Partners (Moderator)
Tony Kong is a strategic leader with substantial hands-on experience in industry as a technology leader and in consulting as a client executive leading projects for Fortune 1000 companies. He currently provides guidance and advisory services to Private Equity and industry clients regarding healthcare information technology, reform and compliance. He also has deep experience with enterprise systems, including enterprise resource planning (ERP)/ financial systems, claims processing systems, call center applications, EDI/transaction management systems, supply chain systems, enterprise portals and collaboration applications, healthcare and pharmacy systems, and reporting/analytics systems. Tony has collaborated with clients and internal teams to derive business benefits from IT strategic planning, IT organization transformation, governance strategy, new technology architecture, and security audits and improvements. In addition to having deep experience in the healthcare industry, he has worked with a variety of consumer products, retail, construction, and high-tech enterprises to address complex business issues. Tony joined West Monroe Partners from Regence Blue Cross Blue Shield, a $9 billion company licensed by Blue Cross Blue Shield in Washington, Oregon, Idaho, and Utah, where he was Director of Application Development for core enterprise applications. He managed teams responsible for supporting enterprise package applications and building custom applications on .NET, Java, and Web Services, as well as for developing custom systems integrations. He was also the delivery sponsor for a number of enterprise wide transformation projects including legacy systems migration and consolidation.
Optimal Healthcare: A Point/Counterpoint Ted is vice president of policy at the Illinois Policy Institute, where he develops and recommends solutions to the state’s economic and fiscal problems with a focus on Illinois budget and tax policy, health care, pension reform, education policy and job creation. Recently, Ted was the lead consultant to the Education Committee for Gov. Quinn’s Taxpayer Action Board. That board was responsible for proposing efficiencies in state spending across the state’s various spending programs. Ted has also authored documents focused on the state’s education finances and the general state aid formula, as well as school vouchers.
Ted Dabrowski Vice President Illinois Policy Institute
Prior to joining the Institute, Ted had a 16-year career in international management with Citigroup in both Mexico and Poland. His most recent role was managing the Corporate and Investment Banking Division for Citibank-Handlowy, Citibank’s majority-owned bank in Poland. Before that, he was the treasurer and the sales and trading head of the $8 billion-asset Citibank-Handlowy. In Mexico, Ted was the assistant treasurer of Citibank Mexico, where he oversaw various units of the sales and trading operations. Ted is a first-generation American born in Chicago. He also is a recent graduate of the Harris School of Public Policy at the University of Chicago. He also holds an MBA in Finance from the Wharton School at the University of Pennsylvania, as well as an undergraduate degree in Industrial Management from e Georgia Institute of Technology.
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Optimal Healthcare: A Point/Counterpoint continued Brian Scullion, M.D. joined the Corporate Finance department at William Blair & Company in 1999 and is a Managing Director in the healthcare group. Dr. Scullion combines over 14 years’ investment banking experience with real-world knowledge of healthcare’s clinical, scientific and reimbursement aspects gained in his prior career as a practicing physician and medical director. Dr. Scullion has closed over 50 transactions for both public and private companies in the medical technology, diagnostic, pharmaceutical and healthcare services sectors. Prior to joining William Blair, Dr. Scullion was the Chief Medical Officer at Vida Healthcare, a disease management company focused on cancer. Before Vida, Dr. Scullion was Medical Director at FHP of Illinois and Associate Medical Director at Rush Prudential Health Plans, both management care organizations. Dr. Scullion received an A.B. (magna cum laude) from Columbia University, an M.D. from Stanford University (where he also pursued research in molecular biology) and an M.B.A. from Northwestern University’s Kellogg Graduate School of Brian Scullion Management. Dr. Scullion also completed a residency in internal medicine and lives in Managing Director William Blair & Company Winnetka, Illinois, with his wife and three children. (Moderator)
Bart Stupak Partner Venable & ACA co-author
Former U.S. Congressman Bart Stupak is a partner in Venable’s Legislative and Government Affairs group. As Congressman to Michigan’s First Congressional District for 18 years, Mr. Stupak developed a deep understanding of issues that directly affected his constituents, including matters related to energy, healthcare, telecommunications and international trade. As an attorney at Venable, he is in a unique position to provide clients with well-informed, extensive counsel that is based on a thorough knowledge of these industries and related legislation. While in Congress, Mr. Stupak served on the Energy and Commerce Committee for 16 years. During his tenure on the Energy and Commerce Committee, he served on a number of subcommittees, including Health, Energy and the Environment, Communications, Technology and the Internet, Consumer Protection, Commerce and Trade, and Oversight and Investigations. As Chairman of the Oversight and Investigations Subcommittee, Mr. Stupak helped lead investigations into key issues, such as physical and cyber security breaches at U.S. nuclear labs, food and drug safety, and insurance company rescissions of insurance policies. He also played an important role in the passage of H.R. 3590, the Patient Protection and Affordable Care Act of 2010. Additionally, Mr. Stupak served on the Armed Services, Government Reform and Merchant Marine and Fisheries Committees. Prior to joining the U.S. House of Representatives, Mr. Stupak worked in private practice in Michigan. Mr. Stupak began his career in public service as a police officer in Escanaba, Michigan. He continued his career in law enforcement as a Michigan State Police Trooper until he was medically retired due to an injury sustained in the line of duty. He also served in the Michigan House of Representatives. In spring 2011, Mr. Stupak was a Fellow at the Institute of Politics, Harvard University, John F. Kennedy School of Government.
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The Authority on Middle Market Loans
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Contact: Andy Steuerman, Head of Middle Market Lending 212.660.7280 or asteuerman@golubcapital.com
Speakers
continued
Innovation: Informatics and Analytics Neil Borg joined Ziegler in 2006. As a managing director, he is responsible for the management of the firm’s corporate finance practice. Neil also focuses his time on building out Ziegler’s forprofit strategic advisory and principal investing efforts. Prior to joining Ziegler, Neil was in the Healthcare Services Investment Banking divisions of J.P. Morgan (previously Chase H&Q and Hambrecht & Quist) and Friedman, Billings, Ramsey & Co. While at Hambrecht & Quist, Neil was a partner in an affiliated venture capital fund, H&Q Serv*s Ventures, focused on early stage healthcare investments on behalf of Hambrecht & Quist and Johnson & Johnson.
Neil Borg Managing Director Ziegler
Over his career, Neil has completed over 65 transactions including strategic advisory assignments, public and private equity financings and equity investments principally for emerging growth, middle market companies in the healthcare services and healthcare information technology sectors. In addition, Neil currently sits on the Board of Directors of Auditz, LLC and was most recently on the Board of Directors of Certify Data Systems, Inc. prior to its sale to Humana Inc. in 2012. Neil earned an M.B.A. from Columbia Business School and a B.A. in economics and minor in philosophy (cum laude) from Denison University.
David Epstein is Allscripts’ Vice President of Care Coordination and Analytics Solutions where he is responsible for their corporate direction of “over the EHR” population health-oriented solutions that encompass the aggregation of clinical and financial information, cohort identification and predictive analytics, care plan definition and coordination through transitions of care and patient engagement.
David Epstein Vice President Care Coordination & Analytics Solution Management Allscripts
Prior to joining Allscripts, Mr. Epstein spent 20 years at IBM initially at the TJ Watson Research facility and later in the IBM Soware Group where, as Director of Public Sector Solutions, he was responsible for driving IBM’s Health Integration Framework and, as an early proponent of national scale health IT integration, he drove the implementation of Connecting for Health’s landmark Healthcare Collaborative Network pilot project that linked the Centers for Disease Control, the Centers for Medicare & Medicaid Services and the Food & Drug Administration with major healthcare organizations, automating the monitoring and reporting of biosurveillance, adverse drug and quality of care events. Mr. Epstein began his career at Bolt, Beranek & Newman, which, despite what Al Gore thinks, actually DID invent the Internet, where he was the principal system architect for SIMNET, a $250M Defense Advanced Research Projects Agency-sponsored tactical training simulator network. Mr. Epstein holds a Master of Business Administration in Entrepreneurship from Columbia Business School. He has a Bachelor of Arts degree and a Master of Science degree in Computer Science from Harvard University and was a licensed NY State EMT.
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Innovation: Informatics and Analytics continued Dr. Anil Jain is Senior VP and Chief Medical Information Officer of Explorys, Inc., a Clevelandbased BIG DATA healthcare analytics company formed in 2009 based on innovations that he developed while at the Cleveland Clinic. He leads Informatics and Analytics, Product Management, Training and Solutions Delivery.
Anil Jain Senior Vice President & Chief Medical Information Officer Explorys, Inc.
Dr. Jain began his career at the Cleveland Clinic in 1995, most recently as Senior Executive Director of IT until July 2011 where he led several Health IT innovations, including programs to support research and quality informatics and created interactive dashboards to monitor the “meaningful use” of the Electronic Health Record. He continues to practice medicine and teach medical residents as Consulting Staff at Cleveland Clinic’s Department of Internal Medicine. He was formerly co-Chair of the Information Management Committee of Better Health Greater Cleveland (BHGC), a Robert Wood Johnson Foundation Aligning Forces for Quality (AF4Q) Community. In addition, Dr. Jain had previously served as co-Director of the Biomedical Research Informatics core of the Clinical & Translational Research Collaborative (CTSC) at the Case Western School of Medicine and Instructor at Cleveland Clinic Lerner College of Medicine. Dr. Jain received his undergraduate Biomedical Engineering degree his Medical Degree from Northwestern University. He completed both his internship and residency training at the Cleveland Clinic. Aer completing his appointment as Chief Medical Resident, he joined the Staff in Department of Internal Medicine in 1999 and maintained an active medical practice at the Cleveland Clinic Main Campus supporting primary care as well as consultative medicine until 2011. Dr. Jain also serves on the Board of Directors of Care Alliance, a Cleveland-based Federally Qualified Health Center (FQHC) and is on several advisory boards of Health IT companies across the country. He has authored more than 100 publications and abstracts and has given numerous talks at national and international meetings on the benefits of Health IT and how BIG DATA analytics can support quality improvement and biomedical research. He is a Diplomate of the American Board of Internal Medicine (ABIM), a Fellow of the American College of Physicians (ACP), and an active member of both the Health Information Management and Systems Society (HIMSS) and the American Medical Informatics Association (AMIA). Finally, he serves as a reviewer for several biomedical journals and national meetings. Dr. Scott Nicholson and his data science team at Accretive Health use machine learning and predictive analytics to help providers make better clinical and financial decisions, focusing on both new data-driven innovations, as well as improvements to existing products. Before moving into the healthcare industry, Dr. Nicholson was a team lead, senior data scientist and economist at LinkedIn where his work focused on using analytics and prototyping new data products to increase user engagement. Earlier in his career, Dr. Nicholson built real-time bidding and ad selection algorithms at an online advertising startup. Dr. Nicholson received a Bachelor of Science degree in economics/mathematics from the University of California, Santa Barbara, and earned a Doctor of Philosophy degree in economics from Stanford University in California.
Scott Nicholson Chief Data Scientist Accretive Health
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Speakers
continued
Innovation: Informatics and Analytics continued Tom Churchwell is the founder and CEO of ViMedicus, Inc. He is also Managing Partner of Midwest Venture Partners and of ARCH Development Partners early stage venture partnership. Previously, he was President and CEO of ARCH Development Corporation, a subsidiary of the University of Chicago, which commercialized technology from the University and Argonne National Laboratory. Prior to that, he was President and CEO of Calgene Fresh, Inc., a 1992 start-up company which produced and marketed the MacGregor’s FLAVR SAVR tomato, the world’s first biotech food product. Prior to joining Calgene Fresh, Tom was Vice President of ARCH Development Corporation Development. Before starting Calgene Fresh, Tom held several senior management positions at the NutraSweet Company, including Vice President, Sales and legal positions at G.D. Searle & Co., American Hospital Supply Corporation and e Coca-Cola Export Corporation. Tom Churchwell CEO ViMedicus, Inc. (Moderator)
He holds a BA degree from DePauw University and JD degree from Northwestern University School of Law. He also is a Graduate of the Advanced Management Program at Harvard Graduate School of Business Administration.
Deals: The Regulatory Impact and Opportunities Dan is a Principal at Sterling Partners where he focuses on business services, healthcare services and healthcare information technology. With 13 years of experience in owning and operating businesses, Dan has a track record of building successful partnerships with management teams, helping them to rapidly dissect the competitive landscape, market potential, regulatory risks and barriers to entry. His background in technology enables him to help Sterling portfolio investments leverage technology in a way to further differentiate a business by building competitive moats. Additionally, Dan enjoys the challenge of sales force design, metrics to measure effectiveness, and creative methods for alignment of incentives. He currently works with Sterling portfolio investments Avectra, First Choice Emergency Room, KidsCare Dental, and e SAVO Group. Dan Hosler Principal Sterling Capital Partners
Dan’s background spans launching and operating companies, and developing innovative technology solutions to solve complex business problems. Prior to joining Sterling Partners in 2006, Dan was Vice President of Product Marketing at e Activ Group, where he oversaw the company’s retail sales and sales operations. His role included oversight of product distribution and the IT management of EDI systems. While at Activ, Dan developed soware that enabled the company to manage EDI compliance in a timely, cost-effective manner. His solution enabled the delivery of large retail orders including Rite Aid, Walgreens and Albertsons. Dan also cofounded and operated Microganics, where he designed the company’s suite of agricultural products and built a nationwide distribution network for those products. He also helped raise venture funding for the business and is a co-owner of the patent on the technology. Dan also founded an IT and Process Engineering consulting firm, which he began managing while still in high school. is role gave Dan invaluable experience in providing meaningful ROI analysis for customers who wanted to leverage technology to run their businesses more efficiently— experience that he utilizes in his work with Sterling portfolio partners today.
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Deals: The Regulatory Impact and Opportunities continued Peter joined Beecken Petty O'Keefe & Company in 2008. Prior to joining BPOC, he spent seven years in healthcare leveraged finance with Heller/GE Healthcare and CapitalSource where he was responsible for business development, underwriting, restructurings and portfolio management. Peter serves or observes on the Board of Directors of Hospital Physician Partners and ISG Holdings. He received a B.S. in Finance from Miami University (OH) and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University.
Peter Magas Principal Beecken Petty O’Keefe & Company
William McMaster joined Primus Capital in 2008. Mr. McMaster focuses on the firm's healthcare and financial services investment activities. Mr. McMaster is a Director of American Institutes Holdings, LLC, Ovation Holdings, Inc. and Encore National Bank. Mr. McMaster received a BA in Economics from Cornell University and received his MBA with distinction from the Kellogg School of Management at Northwestern University.
Bill McMaster Director Primus Capital
Brian Fortune President Farragut Square Group (Moderator)
Brian is the President and Chief Political Strategist of FSG. Prior to founding FSG, Brian was a Political Strategist and a Managing Director of the Marwood Research Group. Before Marwood, Brian served the Republican leadership in the House for nearly a decade, working primarily for Conference Chairmen John Boehner (R-OH) and Majority Leader Dick Armey (R-TX). In addition, he served at the National Republican Congressional Committee under Representative Bill Paxon (R-NY). While working for the House leadership, Fortune served as the Staff Director of Legislative Digest, the policy analysis and communications division of the House Republican Conference. His division served as the central repository of legislative information for Republican lawmakers and their staff. In that role, Fortune worked with the senior staff on all House Committees, but concentrated primarily on issues before the Ways and Means, Energy and Commerce and Appropriations Committees. Mr. Fortune worked directly with leadership on all of the major healthcare initiatives of the time, including BBA97, BBRA, HIPAA and BIPA 2000. He is a graduate of Oregon State.
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Industry Segments: Hospitals (medical, surgery and specialty) Nursing homes Home health service providers Durable medical equipment manufacturers Pharmaceutical laboratories Laboratory testing companies Physician practices Psychological and substance abuse facilities Clinical research organizations
Product Tyyp pes: Revolving lines Term loans
Transaction Tyyp pes: Working capital Acquisitions Refinancings DSO expansion Equipment purchases Balance sheet restructuring Growth capital Leveraged recapitalizations
Investment Criteria: Experienced management team Sustainable operations Available collateral
Investment Size: $1 million to $10 million Ability to syndicate larger transactions
MC Healthcare Finance is a healthcare specialized lender offering assetet based financing to lower middle-market companies in all segments of the healthcare industry. MC Healthcare is a committed partner to its customers as ƚŚĞLJ ĨĂĐĞ ƵŶĐĞƌƚĂŝŶ ĨŝŶĂŶĐŝŶŐ ĐŚĂůůĞŶŐĞƐ ŝŶ ƚŚĞ ĐƵƌƌĞŶƚ ŵĂƌŬĞƚ͘ D ,ĞĂůƚŚĐĂƌĞ͛Ɛ ĨŽĐƵƐ ŝƐ ŽŶ ĚŝƌĞĐƚ ůĞŶĚŝŶŐ ĂŶĚ servicing asset-based loans functioning as both a principal lender and as a lending partner to community and regional banks. MC Healthcare Finance takes pride in its focus on: one industry, the healthcare industry; one product, ABL principal lender and servicer; and its focus on strictly middle market borrowers. Our business model is simply to be the premier middle market, ABL, healthcare industry lender and servicer.
MC Healthcare Finance LLC, an affiliate of Monroe Capital LLC
Chicago භ Irvine භ Dallas
METROPOLITAN CAPITAL IS PROUD TO SUPPORT ACG CHICAGO’S HEALTHCARE M&A CONFERENCE
Metropolitan Capital is a premier Universal Bank offering Private Banking & Wealth Advisory, Commercial Banking, and Investment Banking services that cater to high net worth individuals and entrepreneurs, their families, and the businesses they own and operate.
METROPOLITAN CAPITAL NINE EAST ONTARIO CHICAGO, ILLINOIS 60611 312.640.2300 METCAPBANK.COM
Speakers
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Outsourcing the Pharma and Device Industries Dr. Bernstein has over 10 years' experience at entrepreneurial pharmaceutical companies in executive and board positions, notably as a director of Sirius Laboratories and as Chief Operating Officer, Chief Financial Officer, and a director of Winston Laboratories. He craed the original business plan of Elorac and provided strategic counsel on business development opportunities. Prior to entering the pharmaceutical industry, Dr. Bernstein was an assistant professor of economics and public policy at the University of Wisconsin-Madison. He received a B.A. in economics summa cum laude from Amherst College and a Ph.D. in business economics from Harvard University.
Jeff Bernstein President & CEO Elorac, Inc.
Kyle Bradford joined American Capital in March 2002 and is a Managing Director in the Dallas Buyout Group. He is responsible for originating, executing and managing investments in middlemarket companies across a variety of industry sectors, including life science services, medical device, medical tools and equipment, and healthcare services, among others. Additionally, he is responsible for American Capital’s investment effort in healthcare royalties and healthcare royalty finance. Mr. Bradford currently is chairman of American Capital portfolio companies CML Pharmaceuticals and ECA Medical, serves on the board of directors of e Meadows and DynoJet, and is a board observer of Scientific Protein Laboratories. He was previously chairman of Value Plastics and on the board of directors of Hospitality Mints, Future Food and Unwired Technology.
Kyle Bradford Managing Director American Capital, Ltd.
Prior to joining American Capital, Mr. Bradford worked in the Technology Investment Banking Division of Salomon Smith Barney in New York. At Salomon, Mr. Bradford specialized in equity and debt underwriting and merger and acquisition advisory assignments for companies in various technology sectors. Before Salomon, he worked in the Syndicated Finance Group of Banc of America Securities in New York. Mr. Bradford received a Masters in Professional Accounting and a Bachelors of Business Administration from the University of Texas at Austin. He is currently on the Advisory Board of the College of Pharmacy at the University of Texas at Austin. Ben joined GTCR in 2008 as a Vice President. Prior to joining GTCR, he worked as a venture capitalist at Alta Partners, as well as an investment banking Associate at JMP Securities and an Analyst in the Mergers & Acquisitions group at J.P. Morgan (formerly Hambrecht & Quist). He holds an MBA from the Wharton School at the University of Pennsylvania and a BA in History magna cum laude from Colgate University. Ben also holds a Masters degree in Biotechnology from the School of Applied Sciences & Engineering at the University of Pennsylvania. He currently is a director of Actient Pharmaceuticals, Cord Blood Registry and Sterigenics and also works extensively with Devicor Medical Products.
Benjamin Daverman Vice President GTCR
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Outsourcing the Pharma and Device Industries continued Senior-level Business Leader and Entrepreneurial Executive with a solid background in financial planning, product development, engineering, manufacturing, sales and marketing. Born and raised in Sweden with a Master in Chemical Engineering from Lunds Institute of Technology. Several Management position in Swedish coporation from engineering to marketing and sales. 19 years of experience in the US market from1993 running companies including start-ups and turnarounds. Extensive global background in Medical Devices and Contract Manufacturing. President Perstorp Compounds, President Nolato Texas, President Nolato Shieldmate, Vice President Sanmina-SCI, Director of Operation Strategy Hospira and President Amsino International for OEM Contract Manufacturing for Medical Devices. Currently VP Business Development Medical with Tekni-Plex International Inc. Torsten Nilson Vice President Business Development-Medical Tekni-Plex International, Inc.
Rusty Ray Partner 11TPartners LLC (Moderator)
Rusty Ray is currently a partner with 11T Partners, a healthcare-only investment bank. He has worked with a wide variety of clients across the healthcare industry ranging from large pharmaceutical companies to early-stage drug development companies to medical device and service-based companies. In the eight years prior to forming 11T Partners, Mr. Ray was a Partner in a boutique healthcare investment banking firm in New York. Mr. Ray served as Deputy Director for eight years with Resources for the Future (“RFF”) a non-partisan Washington-based think tank that conducts independent economic research. During his tenure at RFF, the organization conducted a number of studies related to the pharmaceutical and biotechnology industries. Beyond life sciences, Mr. Ray also worked on issues related to emissions credit trading and utility restructuring. Prior to joining RFF, Mr. Ray worked with e Meningitis Research Foundation in London where he worked to support basic research to cure the disease. Mr. Ray is currently Chairman of the Board of Directors of Apricus Bio (NASDAQ: APRI). He has been a Director since 2009 and served as a member of Compensation, Audit, Corporate Governance/Nominating and Finance Committees. Mr. is also a Director of NewMediaMill, LLC. Mr. Ray holds an M.B.A. degree in Finance from the Fordham University School of Business, and received a B.S. degree in Biology from Wake Forest University. Mr. Ray resides in New York with his wife and daughter.
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Deep healthcare experience. Demonstrated commitment. Dedicated team. • Senior, senior stretch, unitranche and 2nd lien debt financing • Borrower EBITDA: $5 million to $50 million • Underwritten facilities: up to $150 million • Target hold: up to $50 million
For more information: Stuart Smartt Managing Director stuart.smartt@nxtcapital.com 678.819.3830
Healthcare Sectors: • Providers (Inpatient, Outpatient, In-Home, Dental) • Payors (PPOs, TPAs) • Outsourced Services, Distribution, Healthcare IT • Pharma/Bio (Services, Manufacturing) • Devices (Services, Manufacturing, Products)
www.nxtcapital.com
PROSPIRA
$91,500,000
$190,000,000
$61,125,000
$300,000,000
GTCR
Capstar Partners KKR & Co. and Management
Enhanced Equity Funds W ebster Capital Webster Pulse Equity Partners & Mgmt
American Capital, Ltd.
Joint Lead Arranger
Participant
Documentation Agent
Joint Lead Arranger
$70,000,000 $36,800,000
Undisclosed
$241,000,000
$61,000,000
Arsenal Capital Partners Great Point Partners and Management
Audax Group
JLL Partners
DFW Capital Partners
Joint Lead Arranger Syndication Agent
Sole Lead Arranger
Joint Lead Arranger
Joint Lead Arranger
$112,500,000 $174,500,000
$36,800,000
$174,500,000
$72,100,000
Beeken, Petty, O’Keefe J.H. Whitney & Co. and Company
Great Point Partners
Beeken, Petty, Petty, O’Keefe and Company
Arsenal Capital Partners
Documentation ParticipantAgent
Joint Lead Arranger
Participant
Co-Documentation Agent
SELEC HEALTHCARE SERVICES SE S SELECT TRANSACTIONS P Pali ali Corp $8,250,000
$20,000,000
$6,250,000
$21,500,000
Undisclosed Amount
Term T erm Loan & R evolving Line Line of Credit Cr Credit Revolving
Revolving Line Line of Credit C Crredit e Revolving
e m Loan & Term T er R evolving Line Line of Credit Cr Credit Revolving
Term T erm Loan & R evolving Line Line of Credit C Crredit Revolving
e m Loan & T Term er R evolving Line Line of Credit C Crredit Revolving
Kansas City City, y,, MO
Woonsocket, W oonsocket, RI
N Norcross, orcross, GA
Honolulu, Honolulu, HI
Milford, M ilford, MA
Outsourced Outsourced Hospital Hospital Services Services P Provider rovider
Outsourced Hospital Hospital Outsourced Services P rovider Services Provider
$15,000,000
$8,500,000
$4,000,000
$1,000,000
$15,000,000
Term T erm Loan & Revolving R evolving Line Line of Credit Cr Credit
Term T erm Loan & Revolving R evolving Line Line of Credit Cr Credit
Revolving R evolving Line Line of Credit C Crredit
Revolving Revolving Line Line of Credit C Crredit
Revolving Revolving Line Line of Credit C Crredit
Denver, Denverr, CO
Chesterfield, field, MO Chester
Plano, Plano, TX TX
Denton, Denton, TX TX
NY
$5,000,000
$20,000,000
$16,240,000
$15,000,000
$5,000,000
Revolving Revolving Line Line of Credit Cr Credit
Term T erm Loan & R evolving Line Line of Credit C Crredit Revolving
Term T erm Loan
Revolving Revolving Line Line of Credit Cr Credit
Term erm Loan & T Revolving Cr Credit R evolving Line Line of Credit
Dallas, D allas, TX TX
Torrance, T orrance, CA
Culver Culver City City, y,, CA
Timonium, Ti imonium, MD
SSkokie, kokie, IL
$6,680,000
$1,500,000
$5,000,000
$68,500,000
$16,000,000
Term T erm Loan
R Revolving evolving Line Line of Credit Cr Credit
Term T erm Loan & Revolving Line Line of Credit C Crredit Revolving
Term T erm Loan & R evolving Line Line of Credit Cr Credit Revolving
Term erm Loan & T R evolving Line Line of Credit C Crredit Revolving
Louisville, KY
Westlake W estlake V Village, illage, CA
B Brentwood, rentwood, TN
JJackson, ackson, MI
West W est H Hollywood, ollywood, CA
Speakers
continued
The Economics of Today’s Healthcare Deal W. Michael Karnes oversees the financial aspect of all the Regent facilities. Prior to co-founding Regent, Michael served as chief administrative officer of GTCR-Golder Rauner, one of the largest and oldest venture capital firms in the U.S. He also worked as CFO for Prime Group Realty Trust and Balcor, a subsidiary of American Express. He holds a BS in accounting from the University of Maryland, a BBA-Finance degree from University of Notre Dame and an MBA degree from Harvard Business School.
W. Michael Karnes CFO Regent Surgical Health
Mr. Morfitt joined Frazier Healthcare in 2003 as an Associate and became a Partner in 2011. Mr Morfitt is a member of the firm’s Growth Equity team. Mr. Morfitt assists with the development and review of Growth Equity investment opportunities. He serves on the boards of Pentec Health, TridentUSA Health Services, Correct Care Solutions, Informed Medical Communications and Orthotic Holdings. Prior to joining Frazier Healthcare, Mr. Morfitt was an Associate at Summit Partners, a later stage venture capital and private equity firm. While at Summit, he focused on identifying and evaluating middle market growth equity investment opportunities in the healthcare, technology and industrial growth sectors. Mr. Morfitt holds a B.S., Phi Beta Kappa, and an M.S. in Management Science and Engineering from Stanford University. Feel free to contact him at brian@frazierhealthcare.com Brian Morfitt Partner Frazier Healthcare
David Neighbours, a Partner, joined WCP in 2003. Prior to joining WCP, Mr. Neighbours worked for Citigroup Investments in New York where he was responsible for the analysis, due diligence and execution of numerous private equity, mezzanine and structured product investments in a variety of industries, including communications, consumer products, financial services, healthcare and leisure. Previously, Mr. Neighbours was with Salomon Smith Barney in New York, where he worked in the firm’s proprietary investment group, SSB Capital Partners, and prior to that, in the firm’s investment banking division. Mr. Neighbours holds a B.B.A., cum laude, in Finance from the University of Notre Dame. He currently serves as Chairman of the Board of Adreima and Optimum Outcomes and as a member of the Board of Acadia Healthcare Company (NASDAQ: ACHC), Cogent HMG, ProNerve and True Partners Consulting. David O. Neighbours In addition to his activities at WCP, Mr. Neighbours serves as a member of the Boys and Girls Partner Clubs of Greater Chicago’s Corporate Board and as a member of the Rush University Medical Waud Capital Center Associates Board. Mr. Neighbours was also a founding officer of e Healthcare Private Partners, L.L.C Equity Association, a non-profit trade association that represents the U.S. healthcare private equity industry. ®
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The Economics of Today’s Healthcare Deal continued Mr. Van Horn holds a Bachelor of Science in Molecular, Cell and Developmental Biology from the University of California, Los Angeles and an MBA from the Kellogg School of Management with a major in Health Industry Management.
Todd Van Horn Principal Linden Capital Partners
Mr. Ligibel is a Director in Houlihan Lokey’s Healthcare Group. He has executed and managed a wide range of sellside and buyside M&A transactions, debt and equity financings, restructurings and fairness opinions in the healthcare industry. He has executed dozens of transactions involving companies providing services to healthcare providers including healthcare IT, outsourcing, and distribution, as well as with healthcare providers including hospitals, dental offices, and pain management clinics. Mr. Ligibel is based in Houlihan Lokey’s Chicago office.
Geoff Ligibel Director Houlihan Lokey (Moderator)
Mr. Ligibel’s notable transactions include Achieve Healthcare Information Technologies, American HomePatient, Avega Health Systems, Capitol Spine and Pain Centers, CareFusion Corp., Forum Health Care, Heartland Dental Care, Jefferson Dental Clinics, maxIT Healthcare, Medical Specialties Distributors, MetroSouth Medical Center, Midwest Dental Management, Northeast Dental Management, Reed Group, SDI Health, SXC Health Solutions, and West Penn Allegheny. Before joining Houlihan Lokey in 2004, Mr. Ligibel was a Vice President in the M&A Group of KeyBanc Capital Markets (formerly McDonald Investments). Before joining KeyBanc in 2001, Mr. Ligibel worked in corporate development at NationsRent and in the audit and M&A groups at Ernst & Young. Mr. Ligibel graduated summa cum laude with a B.S. in accounting from Ohio State University. He is a Certified Public Accountant and holds the designation of Chartered Financial Analyst.
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Exhibitor Profiles Mr. Mark Holmquist Sr. Associate (312) 435-0300 mholmquist@bpoc.com
Beecken Petty O'Keefe & Company 131 S. Dearborn, #2800 Chicago, IL 60603 www.bpoc.com
Mr. Peter N. Magas Principal (312) 435-0300 pmagas@bpoc.com
BPOC is a Chicago-based private equity firm founded in 1996 to invest in middlemarket buyout transactions, recapitalizations, and growth platforms in the health care industry. BPOC evaluates, structures, and manages investments on behalf of institutional and individual investors.
Mr. Sean P. Barrette Vice President (312) 698-6332 sbarrette@cgp.com
Chicago Growth Partners is a middle market private equity fund with $1.2 billion of assets under management. We invest $15-$50 million of equity in companies with above average growth prospects in the healthcare, tech-enabled services, industrial technology, and for-profit education sectors. The firm has offices in Chicago and La Jolla, CA.
Chicago Growth Partners 1200 Prospect St., #425 La Jolla, CA 92037 www.cgp.com
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Clearview Capital, LLC 180 N. Stetson Ave., #1300 Chicago, IL 60601 www.clearviewcap.com
Corinthian Capital Corinthian Capital Group, LLC 70 W. Madison St., #1400 Chicago, IL 60602 www.corinthiancap.com
Dr. Arda Minocherhomjee Managing Partner (312) 698-6311 arda@cgp.com
Mr. Matthew Blevins Principal (203) 698-2777 mblevins@clearviewcap.com
Mr. James C. Tucker Principal (312) 550-8060 jtucker@clearviewcap.com
Clearview Capital LLc is a private investment firm specializing in the acquisition and recapitalization of companies with operating profits of $4-$20 million.
Mr. James A. McNair Senior Managing Director (312) 899-9988
Ms. Hope Vaughn Director (212) 920-2328
jmcnair@corinthiancap.com
hvaughn@corinthiancap.com
Corinthian Capital invests in small and middle market companies located primarily in North America. We focus on acquiring businesses with sales between $50 million and $250 million. Corinthian Capital focuses on making equity investments in businesses across a wide variety of industries, including unique, niche manufacturing, distribution, and service companies.
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Mr. Scott C. Brown Associate (312) 649-4594 scottb@edgewaterfunds.com
The Edgewater Funds 900 N Michigan Ave. #1800 Chicago, IL 60611 www.edgewaterfunds.com
Edgewater Growth Capital Partners invests in profitable growth companies which are led by outstanding management teams. Our focus is primarily on companies with revenues of $20 million to $500 million and which meet our profitability and growth requirements. Our approach is to partner with management teams to build value through their company’s organic growth and often through acquisitions. We make both growth equity (minority) and buyout (majority) investments to accommodate the needs of each investment situation.
Matthew D. Barber Associate (312) 327-4542 mbarber@flexpointford.com
Flexpoint Ford 676 N. Michigan Ave., #3300 Chicago, IL 60611 www.flexpointford.com
Geneva Glen Capital 123 N. Wacker Dr., #820 Chicago, IL 60606 www.genevaglencapital.com
Mr. Michael S. Fazekas Vice President (312) 327-4557 mfazekas@flexpointford.com
Flexpoint Ford is a private equity investment firm with $1 billion under management specializing in financial services and healthcare. We look to invest $20 to $300 million of our own equity in each opportunity, but will lead transactions of any size. We target investment in healthcare providers, payers and other benefits-related businesses, distribution and outsourcing businesses, and mature product companies. We are long term partners experienced in assessing and managing the risks and rewards unique to the healthcare industry.
Mr. Adam H. Schecter Managing Director (312) 525-8502
Mr. Tom Wuellner Vice President (312) 525-8503
aschecter@genevaglencapital.com
twuellner@genevaglencapital.com
Geneva Glen Capital is a Chicago-based private equity firm that invests in lower middle-market companies (generally under $100 million in value). As an operationally focused investor, GGC targets buyout and growth equity capital investments of up to $40M in equity per transaction. GGC partners with successful management teams to invest in proven private companies with leading market positions, significant growth potential, and stable cash flows.
Mr. David Prekop Senoir Associate (312) 697-4632 jshafer@hcpcompany.com
HCP & Company 200 W. Madison, #970 Chicago, IL 60606 www.hcpcompany.com
Mr. Shawn R. Ely Director of Business Development (216) 280-7399 shawn@edgewaterfunds.com
Mr. Jason F. Shafer Vice President (312) 697-4527 jshafer@hcpcompany.com
HCP & Company manages $215mm, targeting buyouts or growth equity investments to companies with +$5mm of revenue & positive cash flow. HCP invests between $5mm & $22.5mm of equity and is flexible on structure (minority/majority). Within healthcare services, HCP targets the following subsectors: Providers - Behavioral; DPM; Behavioral; Hospice; Hospitalists; Therapy Niche Managed Care - Disease (i.e. diabetes), patient (i.e. dual eligible) or benefits (i.e. medication therapy management) specific services; Outsourced Services - Revenue cycle mgmt, data analytics & other tech-enabled services.
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Exhibitor Profiles
continued
Mr. Matt Lozow Vice President (212) 506-0500 mlozow@higcapital.com
H.I.G. Capital 1450 Brickell Ave., 31st Fl. Miami, FL 33131 www.higcapital.com
H.I.G. Capital is a leading global private equity investment firm with more than $12 billion of equity capital under management and a team of over 250 investment professionals. Based in Miami, and with offices in Atlanta, Boston, Chicago, Dallas, New York, and San Francisco in the U.S., as well as international affiliate offices in London, Hamburg, Madrid, Paris and Rio de Janeiro, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. For more information, visit www.higcapital.com.
Mr. Todd Van Horn Principal (312) 506-5660 tvanhorn@lindenllc.com
Linden Capital Partners 111 S. Wacker Dr., #3350 Chicago, IL 60606 www.lindenllc.com
Mr. John A. Studdard, Jr. Principal (440) 684-1400 jstuddard@linsalatacapital.com
Linsalata Capital Partners (“LinCap”) was founded in 1984. Our 101 acquisitions, with combined transaction value exceeding $3 billion have made Linsalata Capital Partners a leading middle-market buyout firm. Through a progression of seven funds, we have raised more than $1.4 billion of equity capital from our institutional and individual investors. We are currently investing out of Linsalata Capital Partners Fund VI, LP raised in 2011.
Mr. Edward M. Lhee Partner (312) 876-9412 elhee@newharborcap.com
New Harbor Capital 10 South Wacker Dr., #3175 Chicago, IL 60606 www.newharborcap.com
Neelaksh Varshney Senior Associate (312) 506-5607 nvarshney@lindenllc.com
Linden is a healthcare and life science private equity firm that builds exceptional value in mature businesses. We specialize in traditional management buyouts of independent companies as well as investments in non-core businesses owned by large corporations. Our team combines investment, operating and corporate relationship management skills to provide premier portfolio management.
Mr. Robert J. Dondes Consultant (410) 581-3296 rdondes@msn.com
Linsalata Capital Partners 2900 Landerbrook Dr., #280 Mayfield Heights, OH 44124 www.linsaltacapital.com
Mr. Awais Shaikh President (305) 379-2322 ashaikh@higcapital.com
Mr. John. A. Pircon Senior Associate (312) 876-0408 jpircon@newharborcap.com
Chicago-based private equity fund investing in growth-oriented business services, healthcare and education companies in the lower middle-market
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Mr. Patrick J. Jensen Managing Director (312) 701-0053 pjensen@prairie-capital.com
Prairie Capital 191 N. Wacker Dr., #800 Chicago, IL 60606 www.prairie-capital.com
Mr. Sean McNally Managing Director (312) 701-0059 smcnally@prairie-capital.com
“Consistency” has been a Prairie Capital watchword since our founding in 1997. Our investment focus has always been on lower middle market recapitalization or buyout transactions, using a flexible investment approach consisting of equity and supportive subordinated debt in aggregate amounts of $10 to 30 million per investment. Our experienced leadership team has remained constant as well, bringing a wealth of knowledge and insight to our target marketplace. Prairie Capital’s four previous funds were deployed in more than 70 platform companies representing in excess of $525 million of invested capital. We are currently investing out of our latest fund, the $300 million Prairie Capital V.
Mr. Jonathan E. Maschmeyer Vice President (312) 447-6081 jmaschmeyer@pritzkergroup.com
The Pritzker Group 111 S Wacker Dr, Ste 4000 Chicago, IL 60657 www.pritzkergroup.com/
The Pritzker Group acquires North American-based companies with enterprise values between $100 million and $500 million. The firm is differentiated versus traditional PE firms by its proprietary, permanent capital base, which provides a number of unique advantages as an investor and partner with management teams, including: •Focus on long-term growth and value creation •Flexible approach to transaction structure and investment horizon •Deploying follow-on capital to finance growth •Conservative use of debt allows for operating flexibility.
Mr. Matthew N. Thompson Director (617) 351-2839 mthompson@riversidepartners.com
Riverside Partners 699 Boylston St. Boston, MA 02116 www.riversidepartners.com
Riverside Partners is a Boston-based private equity firm that invests in growing middle market healthcare and technology oriented companies, providing owners with liquidity and helpingcompanies accelerate their growth. For two decades, we have partnered with owners and management teams to achieve their goals by applying our deep industry and operation expertise and by acting as trusted partners.
Mr. Michael J. Allietta Managing Partner (312) 324-0877 mike.allietta@sheridanlegacy.com
Sheridan Legacy Group 100 North Riverside Plz, #2450 Chicago, IL 60606 www.sheridanlegacy.com
Mr. Jonathan B. Lewis Managing Partner (312) 324-0879 Jonathan.Lewis@sheridanlegacy.com
Sheridan Legacy Group is a private equity investment firm founded to partner with talented managers, entrepreneurs and owners to acquire, grow, and bring best in class resources to small and medium sized companies in the lower middle market.
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Exhibitor Profiles
Shore Capital Partners 70 E. Lake St. Chicago, IL 60601 www.shorecp.com
Mr. Michael S. Cooper Mr. Ryan D. Kelley Vice President Partner (312) 248-7578 (312) 348-7577 mcooper@shorecp.com rkelley@shorecp.com Mr. John Hennegan Mr. Justin Ishbia Vice President Managing Partner (312) 348-7572 (312) 348-7579 jhennegan@shorecp.com jishbia@shorecp.com Shore Capital Partners is a healthcare-focused lower middle market private equity firm that specializes in partnering with companies that have between $5 and $50 million of revenue.
Mr. Daniel J. Hosler Principal (312) 465-7042 dhosler@sterlingpartners.com
Sterling Partners 401 N. Michigan Ave., #3300 Chicago, IL 60611 www.sterlingpartners.com
Sterling Partners is a mid-market PE fund based in Chicago and Baltimore that manages ~$6B in AUM and invests $10-150M of equity per company in the education, healthcare services, and business services sectors.
Mr. Jeffrey Piper Principal (312) 267-8757 jsp@svoco.com
Svoboda Capital Partners 1 N. Franklin St., #1500 Chicago, IL 60606 www.svoco.com
Mr. Brandon Labrum Vice President (312) 465-7030 blablrum@sterlingpartners.com
Mr. John Svoboda Managing Director (312) 267-8750 jas@svoco.com
Svoboda Capital Partners is a Chicago-based private equity firm that invests in leading middle market growth companies. We focus on companies in the valueadded distribution, business services, and consumer products and services sectors typically valued between $20 million to $100 million. We seek to empower outstanding management teams with a track record of success and a desire to execute on well-defined growth initiatives. Founded in 1998, we have more than 50 years of collective experience, extensive industry contacts and a culture of honesty, integrity and hard work.
What's the Deal? An Analysis of Middle Market M&A Trends (June 12, 2013)
150 respondents, contacts of ACG and S&P Capital IQ, primarily in the accounting, banking, consultancy, and other financial services fields share their view of Healthcare M&A.
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Limited Partners Fund Performance/IRRs LP to GP Commitments
Board Members
Service Providers Public Company Financials Industry Professionals
Portfolio Companies
Industry Trends & Analysis
P itch B ook www.pitchbook.com
Committee Members
Conference Chair Mr. Turmell is a founder and Managing Director of TMT Capital Partners, LLC, a private investment firm that makes control investments in middle market and lowermiddle market companies, and occasionally provides financial advisory services to middle market, lower-middle market, and high growth businesses. Mr. Turmell has over 20 years of experience working with small, medium, and growth businesses. His diverse background includes experience managing financial and operating aspects of companies, including: investment sourcing, analysis, structuring and execution; financial and strategic planning; corporate structuring; investor relations; and leading continuous improvement initiatives. Prior to founding TMT Capital, Mr. Turmell spent time with Golub Capital, Inc., Pfingsten Partners, LLC, and LaSalle Bank, N.A. Thomas M. Turmell A Michigan native, Mr. Turmell holds a BBA degree in Business Administration from the Managing Director University of Notre Dame, and a Masters of Management in Finance, Management and TMT Capital Partners, LLC Strategy, and Organizational Behavior from the J.L. Kellogg Graduate School of Management.
Prior to joining Capital One Bank, Steve Anderson served as Senior Director of Oxford Finance where he managed healthcare lending. Anderson also specialized in healthcare lending as a Director at CapitalSource Finance. Previously, Anderson spent nearly a decade at FINOVA Capital Corporation where he served in a number of capacities including Vice President of Special Assets and Manager of Operations. Anderson currently serves on the board of School District 153 in Homewood, IL and the South Suburban Chicago Chapter of PADS. He is also a member of the Corporate Finance Association and the Association for Corporate Growth. Anderson holds a B.A. from the University of Iowa and an M.B.A from DePaul University.
Steve Anderson Senior Vice President Commercial & Specialty Finance Capital One Bank
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Greg M. Browne is a Managing Director of our investment adviser. He joined Fih Street in April 2011 with over 20 years of leveraged finance experience. Mr. Browne is responsible for developing private equity sponsor relationships and originating loans in the healthcare industry. Before joining Fih Street, Mr. Browne spent eight years as Managing Director at CapitalSource Inc. During this time, he sourced and executed on over $1 billion in committed financing, representing over 65 separate transactions within the healthcare industry.
Greg M. Browne Managing Director Fifth Street
Prior to CapitalSource Inc., Mr. Browne was a Senior Vice President at GE Capital, and its predecessor, Heller Financial, where he was a founding member of a highly successful, healthcare-focused, leveraged finance business. He was personally responsible for the origination, underwriting, and portfolio management of these loans. Other positions in Mr. Browne’s career have included Group Vice President at Sanwa Business Credit Corporation, Senior Loan Manager at GE Capital, and Assistant Vice President at Loyds Bank. Mr. Browne graduated from Ohio Wesleyan University with a B.A. in Economics and Political Science.
Kent Capps is vice president of corporate development at Provista, a leading Group Purchasing Organization focused on the non-acute health care sector, education and corporate markets. In this role, he develops and executes Provista’s in-organic growth strategy and supports organic growth initiatives. Capps has spent more than 10 years in M&A, Corporate Development and Investment Banking. Capps began his career in the investment banking division of Salomon Smith Barney (Citigroup) in New York as a member of the health care coverage group. Capps has an MPA in Accounting and BBA degree in Accounting from the University of Texas at Austin and an MBA from the University of Chicago Booth School of Business.
Kent Capps Vice President, Corporate Development/ Mergers and Acquisitions Provista
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Committee Members
continued
Paul Manzano is currently a Managing Director of Metropolitan Capital Investment Banc, the broker-dealer subsidiary of Metropolitan Capital Bancorp, Inc. He has more than 20 years of executive management and investment banking experience representing and advising investors, companies, developers and acquirers in connection with all phases of investment, corporate strategy, business development, origination and closing for M&A and corporate finance transactions. He received his B.S. degree in Finance from Indiana University, and received his J.D. and M.B.A. degrees concurrently from the University of Washington.
Paul Manzano Managing Director Metropolitan Capital Investment Banc
Mr. Robertson leads Golub Capital’s healthcare finance group and originates, executes and monitors investments for the firm. Prior to joining Golub Capital, Mr. Robertson spent eight years with Antares Capital Corporation, where he led the structuring, underwriting and documentation of transactions. Mr. Robertson also ran Antares Special Opportunities Partners, a distressed debt investment vehicle. Prior to Antares, Mr. Robertson spent three years at LaSalle Bank N.A. Mr. Robertson graduated cum laude from Babson College with a BS in Finance and Investments and has an MBA from Northwestern University’s J.L. Kellogg Graduate School of Management.
Stefano Robertson Managing Director Golub Capital
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With more than twenty years of experience Michael Rosenthal is a trusted advisor to companies, entrepreneurs and investors in a wide range of industries and stages of development. He prides himself on working cooperatively with his clients and colleagues to effectively and efficiently develop creative but practical solutions to business issues designed to help his clients best achieve their business objectives. Mike is a member of the Corporate Group at Polsinelli Shughart, PC.
Michael Rosenthal Corporate Group Polshinelli Shughart
Mike is recognized by Chambers USA each year since 2004 as one of the leading venture capital lawyers in the nation and one of the leading private equity lawyers in Illinois. His practice focuses on private equity and venture capital transactions and fund formation, corporate mergers and acquisitions, joint venture formation, securities matters, corporate finance and workouts and restructurings. Mike also frequently serves as “general outside counsel” for his clients, serving as an extension of their business team. Mike represents venture capital and private equity investors, angel investors and strategic investors in start-up, later stage and mezzanine financing, as well as workout transactions and general portfolio management. His extensive fund formation experience includes representing private equity, venture capital and hedge fund sponsors, as well as limited partners in funds. He has significant experience representing entrepreneurs and their companies in their capital raising efforts and related matters. He also counsels companies with respect to their exit alternatives and acquisition and growth strategies, regularly representing both acquirers and sellers in mergers, acquisitions and similar strategic transactions, including roll-ups. Mike has deep industry expertise in health care (including representation of providers, life science companies, device companies and health care IT companies in mergers and acquisition and investment transactions), technology, energy and telecommunications, as well as with consumer goods and commercial equipment companies.
Kristian Werling is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Chicago office. He focuses his practice on representing medical technology manufacturers, biotechs, diagnostics manufacturers and distributors of medical products in transactional and regulatory matters. Concomitant with his practice in the contemporary landscape of healthcare and life sciences is a related depth of experience in representing private equity and venture capital investors. In this capacity he works with cross-disciplinary teams to conduct legal due diligence and execute acquisitions, add-on acquisitions and divestitures, as well as provide ongoing legal services to portfolio companies
Kristian Werling Partner McDermott Will & Emery LLP
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High-Value M&A in the Era of Health Reform by Jon Henderson and Dayna LaPlante1 transactions occurring across the industry collectively tell the story of transformational reform- driven consolidation and health care business model change, and the continued influential role of private equity investment in the health care sector.
THE CURRENT HEALTH REFORM ERA MARKS THE MOST transformative time in the delivery of and payment for health care services in America. Ever. Called by some the “creative age” in health care, new approaches and ideas are being pursued and improved upon in an R&D environment that is more typical of a manufacturing firm than a health care services business. Transformative change is required for patients, providers, payors, and other participants in the health care industry ecosystem to arrive at their shared future—one that, in meaningful ways, will look increasingly different than the siloed and fragmented past. e most significant enabler of transformation in the health care industry is merger and acquisition activity (also known as “M&A”) because of the pace at which change is now required. Provider and payor M&A deals hit a low in 2009 with under 100 deals, totaling roughly $12 billion in value. However, in 2010 through 2012, deal activity increased significantly. It is estimated that over 600 deals worth just under $90 billion occurred in 2012.2 is robust level of activity is expected to continue into the future3 with 2013 already seeing its share of substantial M&A transactions. For example, in May 2013, Catholic Health Initiatives finalized its $2 billion acquisition of St. Luke’s Episcopal Health System, a six-hospital Houston-based system with a medical staff of 2,800. Additionally, the intended merger between Baylor Health Care System and Scott & White Healthcare will create a $7.7 billion organization. Today’s M&A activity is different in important ways from the health care sector’s deal- making history. Currently, there is an emerging category of “high-value” health care M&A transactions. e value of these transactions is not necessarily reflected by the purchase price, but rather the way in which industry leaders are utilizing M&A to reinvent themselves into sustainable organizations that are equipped to provide the highest quality and most efficient care in their chosen markets. is article will highlight how high-value health care M&A
Consolidation In response to the challenges and opportunities raised by health reform, industry leaders are consolidating through M&A activity as the primary avenue to evolve, and in some cases reinvent, themselves. Prior to health reform, a provider’s desire to achieve operational economies of scale, increase market share, enhance negotiating power with payors, and improve physician alignment primarily drove consolidation.4 Although these factors continue to motivate consolidation, health reform is creating newfound financial pressures through changing reimbursement methods, decreasing reimbursement, new delivery models, and increasing capital needs required for operational sustainability, which are also driving consolidation. e high-value in health reform-driven M&A comes from how providers are utilizing consolidation to effectively navigate and respond to health reform’s demands, thereby ensuring their future success despite a changing environment. Changing Reimbursement and New Delivery Models As the Affordable Care Act5 (ACA) seeks to hold providers more accountable for cost and care outcomes, the industry must respond to the ACA’s sweeping payment reform and introduction of new delivery models. For instance, providers must prepare for different reimbursement incentives brought on by the transition from fee-for-service to value-based payments. Unlike traditional fee-for-service reimbursement, value-based payment models do not reward providers for volume of care but for quality, cost efficient care. Furthermore, emerging models under the ACA, such as accountable care organizations, hold providers responsible for managing a population of patients, and bundled payment initiatives challenge providers to focus on a single episode of
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High-Value M&A in the Era of Health Reform continued care.6 rough these and other initiatives, the ACA pushes providers to share accountability and responsibility for patient care, when success will require significant care coordination and clinical integration. Tasked with re-thinking care delivery under health reform, providers are engaging in M&A as a way to build out their delivery networks and align with other provider types. In particular, hospitals and health systems are acquiring other providers, such as physician practices, ambulatory surgery centers, and home health agencies. e key value gained from these acquisitions rests in the greater control over a patient’s care that the hospital and health system will have before and aer the patient’s inpatient stay. Given this, high-value M&A can result in better patient care coordination and accountability, which provides the platform for the higher quality, more cost efficient care required by health reform.
reduction in overhead expenses, improved operating economies of scale, a deeper balance sheet, improved credit rating, greater ability to invest in technology, and stronger market position. e value of these transactions comes from the greater ease that a larger organization may have in responding to industry demands, which results in a more sustainable organization. Seeking to fully capitalize on that sustainability, some providers are consolidating across organizational types. at is, religious and secular, academic and non-academic, for-profit and non-profit health care organizations, and other combinations, are pooling their resources and collaborating to confront challenges with the added strength of their combination.
Business Model Changes High-value health care M&A activity also reveals how industry players are transforming their business models to more aptly respond to the changing health care landscape. rough M&A, providers are broadening their reach and diversifying their markets and revenue streams, and nontraditional players are entering the marketplace. In turn, providers can better collaborate across industry lines and deliver a more comprehensive offering of health care services across a greater span of the care continuum. e following three M&A trends reflect the ways in which health care organizations can find value through changing their business models.
Decreasing Reimbursement and Increasing Capital Needs In addition to pressure from changing reimbursement models, providers must respond to an overall decrease in reimbursement at a time of increasing capital needs— growth through M&A transactions is one active response. Both the ACA and the American Taxpayer Relief Act7 significantly decrease government reimbursement for many health care services, and states are also cutting back on Medicaid reimbursement. In addition, providers that fail to report on quality measures or achieve meaningful use of Electronic Health Records (EHRs) may experience penalties that reduce their overall reimbursement.8 Furthermore, with the expansion of Medicaid under the ACA, attempts to offset decreasing reimbursement from government payors with yet unchanged commercial payor reimbursement will prove more difficult than in years past. To add to the financial stress, the industry’s move towards EHRs requires providers to invest in IT infrastructures, of which only a small fraction is covered by meaningful use incentive payments. Although data collected and analyzed through use of technology will prove invaluable as providers are held more accountable for care outcomes, this comes at a significant initial cost. e American Hospital Association reports that implementation of the EHR systems necessary to achieve meaningful use can cost from $3 to $200 million per hospital, depending on size.9 us, efforts to rein in health care spending coupled with high capital needs will continue to create a challenging financial environment for providers. M&A transactions enable providers to strengthen their viability and counter these negative financial pressures by
Adding Post-Acute Ancillary Service Lines First, there is a new interest in M&A across services lines. As payors begin to hold hospitals responsible for episodes of care and readmission rates, hospitals and health systems are looking to partner with post-acute providers, such as home health agencies and long-term care facilities. ese transactions are becoming increasingly strategic, because a hospital or health system that directly controls post-acute ancillary care can more easily ensure its discharged patients receive quality care aer leaving the hospital. Further, by acquiring or partnering with other provider types and building out their delivery networks, hospitals and health systems can more effectively shi care to locations that produce the best outcomes at a lower price,10 minimizing the risk brought on by payment reform and stabilizing their position in their markets. e future is the right care setting, the right level of care, at the right price. Diversification through Non-traditional M&A Second, through non-traditional consolidations with varied provider types and non-provider based
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transactions involving private equity increased from 176 deals in 2009 to 265 deals in 2012.12 As the industry continues to respond to health reform, private equity investors will continue to be key in designing and implementing high-value industry consolidation. Private equity as a source of capital and business partnership has been particularly attractive to non-profit hospitals and health systems. e weak financial state of many non-profit hospitals and health systems has le them with insufficient capital to take on the risk associated with changing payment methodologies and to implement the IT infrastructures needed in the new environment. us, nonprofit hospitals and health systems are drawn to the increased access to capital made available through private equity partnerships. Legacy Hospital Partners (LHP) Hospital Group is one example of the several private equity groups that provide needed capital to non-profit hospitals and health systems by forming joint ventures to acquire, own, and manage the facilities. Smaller hospitals and systems may look to large private-equity backed investors to remain relevant or compete in a saturated market, whereas larger non-profit systems may turn to private equity to strategically acquire more facilities and systems.13 Private equity investors have also targeted non-hospital providers as investment opportunities. Private equity has been key in the growth and consolidation of providers such as home health, hospice, lab services, DME, physician practices, ASCs, and dialysis centers. ese provider types share a common profile of being a lower cost provider of care outside of the more costly hospital setting. Despite the attractiveness that private equity investment has to offer for many providers, not all those willing to partner with investors will have the opportunity. Because health reform puts pressure on providers to contain costs, private equity investors are more likely to engage in M&A with health care organizations that can deliver more cost efficient care and have the potential to improve their management processes. Given this, those organizations involved in high-value M&A—i.e. organizations that seek to utilize M&A as a way to reinvent themselves as high quality, low cost providers—have a greater chance of attracting private equity financing, and, therefore, private equity will continue to be an important part of high-value M&A.
organizations, M&A also enables providers to differentiate themselves and diversify their businesses. As an example of this trend between providers, the $4.7 billion acquisition in 2012 of HealthCare Partners, an operator of medical groups and physician networks, was initiated by the dialysis company DaVita, not a health system (as the industry would typically see). And, as an example of this trend involving non-provider based organizations, in 2012, Catholic Health Initiatives acquired a minority stake in Conifer Health Solutions, a Tenet Healthcare subsidiary that provides revenue cycle and business process management services to hospitals. In 2011, Houston-based University General Health System acquired Autimis, LLC and Autimis Medical Billing, LLC, which provide full revenue cycle management services to hospitals, ASCs, outpatient labs, and free-standing outpatient ERs. rough M&A with unlikely partners, providers can transform their business models and streamline care in progressive and creative ways that not only contribute to their ability to remain competitive, but leverage their commitment to clinical excellence and improved patient care outcomes. Blending of Providers and Commercial Payors ird, health care providers and commercial payors can also find value in transactions that blur the traditional divide between them. By acquiring commercial payors, some hospitals and health systems are developing insurance plans as part of a strategy to manage population health. Moreover, by acquiring multiple commercial payors, hospitals and health systems can position themselves to compete for business from employers and offer full benefit packages with a network of providers.11 Not only does entering the insurance business broaden an organization’s business model, but it also allows health care providers to gain access to and capitalize on data typically captured only by commercial payors. In turn, providers can better recognize the frequency and extent of care patients receive and identify areas in need of quality and cost improvement.
Private Equity Private equity investors have played an important part in fueling health care M&A in recent years. e dynamics of health reform have accelerated private equity investor interest because the industry is under pressure to increase efficiency while simultaneously experiencing increasing demand, while at the same time creating caution because of the inherent uncertainty touching many aspects of the health care business. e number of U.S. health care
Insights from Engaging in High-Value M&A Because full implementation of the ACA does not occur until 2018,14 the health care industry will continue to undergo significant change in the future, and health care ®
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High-Value M&A in the Era of Health Reform continued 3. Spotlight on: Healthcare Reform Driving Consolidation, HEALTHCARE INSIDER (Brown Gibbons Lang & Co.), Feb. 2013, available at http://www.bglco.com/ bgl_healthcare_insider_health_reform_a_key_cata.
organizations can look to M&A as a way to transform themselves and respond to new industry demands. Health care organizations and their legal counsel who choose to engage in M&A activity during this era of health reform can benefit from the following five key insights: 1. Counsel should recognize each parties’ non-negotiable “must have” terms going into the deal. is is particularly important when structuring transactions between for-profit and non-profit organizations, as well as religious and secular organizations. 2. e parties should determine whether they share a similar vision and culture. Incompatible cultures greatly impede an organization’s ability to provide the high quality, efficient care it sought to achieve through a transaction. 3. Secure as much support as possible from the parties’ management and staff. e deals with unequivocal board support and high staff support run more smoothly and allow integration activities essential to succeed post-closing. 4. Do not act out of desperation but rather with a purpose of transformation; regardless of each party’s negotiating power, find the equilibrium that properly balances each party’s strategic and operational needs and use those goals in structuring the deal. Deal making today is more about alignment and shared success than in the past. 5. Never underestimate the value that proactive communication and education brings to a transaction. Educate the community, board of directors, medical staff, and employees on the benefits of a transaction. At the end of the day, if an M&A transaction is not designed, planned, executed and implemented with excellence, it will inhibit providers and payors from reinventing themselves and effectuating the change they seek to accomplish through the high-value M&A activity. ■
4. See, e.g., FITCHRATINGS, NONPROFIT HOSPITAL CONSOLIDATION, INTEGRATION, AND ALIGNMENT (2013), available at http://www.fitchratings.com/creditdesk/ reports/report_frame.cfm?rpt_id=698854. 5. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (2010). 6. For more information on health reform initiatives, see Ctrs. for Medicare & Medicaid Innovation Ctr., Innovation Models, http://innovation.cms.gov/ initiatives/index.html. 7. American Taxpayer Relief Act of 2012, Pub. L. No. 112-240, 126 Stat. 313 (2013). 8. For example, both physicians and hospitals face potential payment reductions for failure to report on quality measures. See, e.g., 42 U.S.C. § 1395ww(b)(3)(B) (mandating the Hospital Inpatient Quality Reporting Program); id. § 1295l(t) (mandating the Hospital Outpatient Quality Reporting Program). See also 77 Fed. Reg. 68891, 69323 (Nov. 16, 2012) (discussing potential payment reductions for physicians in the future). 9. AMERICAN HOSP. ASS’N, THE ROAD TO MEANINGFUL USE: WHAT IT TAKES TO IMPLEMENT ELECTRONIC HEALTH RECORD SYSTEMS IN HOSPITALS 11 (2010), available at http://www.aha.org/research/reports/tw/10apr-twHITmeanuse.pdf. 10. James H. Landman, ‘Value Combos’ for Health Care, HFMA, http://www.hfma.org/Content.aspx?id=16706. 11. Melanie Evans, Cutting out the Middleman: Systems Buying and Developing Insurance Plans, MODERNHEALTHCARE.COM (Mar. 23, 2013), http://www.modernhealthcare.com/article/20130323/MAGAZINE/303239976. 12. MCGLADREY, HEALTH CARE: MCGLADREY QUARTERLY PRIVATE EQUITY DEAL FLOW PROFILE, Q2 2013 2 (2013), available at http://mcgladrey.com/pdf/ private_equity_health_care_2013_q2_review.pdf. 13. Jim McLaughlin, Private Equity and Non-Profit Hospitals: Strange Bedfellows or Saving Grace?, BECKER’S HOSP. REV. (Mar. 26, 2013), http://www.beckershospitalreview.com/hospital-transactions-andvaluation/private-equity-and-non-profit-hospitals-strange-bedfellows-orsaving-grace.html. 14. e ACA imposes an excise tax on high cost employer-sponsored coverage, which takes effect on tax years beginning January 1, 2018. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 9001, 124 Stat. 119 , 848–52 (2010) (codified at 26 U.S.C. § 2980I).
1. Jon Henderson is resident in Polsinelli, P.C.’s Dallas, Texas office. He is a Corporate Healthcare Shareholder and Chair of the firm’s national Corporate Practice Group. Dayna LaPlante is a 2014 J.D. Candidate at Loyola University Chicago School of Law and resident in the firm’s Chicago, Illinois office. e authors would like to thank Polsinelli attorneys, Douglas Anning, Fred Entin, Daniel Reinberg, Linas Grikis, Chad Knight, Matthew Murer, Kristen Rosati, and Frank Ross, for their brainstorming efforts and contributions to the article. 2. PWC, US HEALTHCARE M&A INSIGHTS: ANALYSIS AND TRENDS IN US HEALTHCARE M&A ACTIVITY 2012 AND 2013 OUTLOOK 5 (2012), available at http://www.pwc.com/en_US/us/healthcare/assets/healthcare-ma-insightsannual-report.pdf.
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Spring 2013
Top Five Traps for the Unwary in Spin-Offs
1. Tax-Free Qualification – Legitimate Business Purpose
A wave of corporate breakups has swept through the United States over the last few years as investors have taken notice of the fact that smaller companies focused on a single business tend to outperform their more diversified peers. A primary vehicle for these breakups has been the spin-off transaction, in which a publicly traded parent company distributes the shares of the spinoff company (spinco) to its own shareholders, creating a new, independent publicly traded entity. The New York Times, citing Dealogic, reported that there were 93 spin-off transactions worth $128 billion in 2011, and that 2012 kept pace with 85 spin-off transactions worth $109 billion. The rationale for a spin-off often is to unlock the value in a business or division that is trapped in a larger corporate bureaucracy. Conglomerates tend to spread capital across all of their divisions rather than focusing on the individual opportunities within each business that are the most promising. Holding company structures also can make decisionmaking more cumbersome and equity incentives less incentivizing for division management who feel as though their hard work is being diluted by the underperformance of other divisions or businesses.
Spin-offs, however, are complicated transactions that require a great deal of advance planning. In many cases, an announcement that a parent company is considering the spin-off of one of its businesses is actually the start of a “dual-track” process wherein the parent company considers and plans for a spin-off while also remaining open to potential bids from third parties to acquire the business. In even more complicated cases, a parent company agrees to sell a business to an acquirer in connection with a spinoff transaction. The vast majority of spin-off transactions are designed to qualify under the rules of the Internal Revenue Code as “tax free” to the parent company and the shareholders who receive the spinco stock. With this in mind, any company considering spinning off a division or business should keep in mind the following five potential traps.
The spin-off must satisfy a legitimate business purpose in order to qualify under both the tax-free rules of the Internal Revenue Code and the Securities Act of 1933. The tax authorities require that the spin-off be motivated in whole or in substantial part by one or more legitimate corporate business purposes in order to ensure that the purpose of the transaction is not simply “tax avoidance.” The business purpose requirement is one of many requirements under the tax laws to qualify for a tax-free spin-off. Because the costs of triggering tax in a spin-off transaction often are very high, most parent companies obtain a legal opinion from outside counsel and obtain a ruling from the Internal Revenue Service as a condition to completing a spin-off transaction. As discussed in relation to trap number five below, a legitimate business purpose for the spin-off also is required under the securities laws in order for the distribution of the spinco stock to not be treated as a “sale” of securities by the parent company or the spinco requiring Securities Act of 1933 registration and the strict liability standard of care that comes with such a registration. See the article entitled, “Five Key Tax Considerations for SpinOff Transactions” for a more in depth discussion of tax issues raised in spin-offs.
2. Separation of Assets and Liabilities
Before a business or a division can be spun off, both its assets and its liabilities must be separated. Large companies with long operating histories often find that the process of separating out the spinco business is not straightforward, because the legal entities that house the business might also house other businesses and divisions that share assets, services, products, employees, vendors and customers with the spinco business. The pre-spin separation transactions should avoid triggering contractual defaults and remedies under commercial agreements, financing agreements, intellectual property licensing agreements, collective bargaining agreements, employment contracts, benefit plans, etc. Often the spinco and the parent company or another legacy business must enter into complex sharing or licensing agreements or joint ventures relating to valuable intellectual property, such as trade names, trademarks or patents, as well as employee matters. See the article entitled “Trademark, Domain Name and Other IP Considerations for Spin-Offs” for a more in depth discussion of IP issues raised in spin-offs and see the article entitled,
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“Employee Benefit Issues in a Spin-Off” for a more in depth discussion of employee benefit issues raised in spin-offs.
The sharing of liabilities is often the most complicated endeavour because of the slew of legal obligations that are triggered. In allocating liabilities to the spinco, the parent company must evaluate the impact such allocation will have on the solvency of the parent and the spinco. Parent company directors can face personal liability under state corporate law for making an unlawful dividend because the company lacked sufficient capital to make such a dividend or for rendering the parent company insolvent by distributing out the spinco business, and the parent company itself can face claims of constructive fraudulent conveyance—i.e., the parent company received less than equivalent value, and either the parent or spinco was rendered insolvent (assets do not exceed liabilities), the parent and/or spinco was left with unreasonably small capital to run its respective business, or the parent or spinco was left with debts that exceed its respective ability to pay those debts as they become due. Parent company directors can rely on legal experts and financial advisors to assist them in satisfying their duty of care. A solvency opinion from a nationally recognized provider of such opinions is often a condition to the consummation of a spin-off transaction. Such an opinion may be helpful to the directors of the parent company and spinco for a variety of reasons: (i) it can help to show that the directors properly exercised their duty of care in determining to enter into the spinoff transaction; (ii) it can assist in rebutting a fraudulent conveyance claim; and (iii) it can assist in rebutting a claim that the company had insufficient capital to make such a dividend.
3. Transition Services
While one of the key rationales for spinning off a business or division is to allow the enterprise to operate independently, the reality in most cases is that, at least during the first year or so post-spin, a spinco must rely on its former parent company to provide many key administrative and operational services during the spinco’s transition period to a self-sufficient, independent public company. During the pre-spin planning period, companies should consider, among other things, which transition services will be required, how they will be provided, for how long and under what pricing terms. Typical transition services include legal, internal auditing, logistics, procurement, quality assurance, distribution and marketing. These arrangements often have durations that last between six and 24 months. Many parent companies agree to provide such transition services purely on a cost basis, while others will use a “cost plus” or “market” rate.
4. Spinco Management and Board of Directors
Again, while independence from the former parent company is a key benefit for most spincos, having corporate managers with institutional knowledge and history with the enterprise is an important factor in assisting the spinco to successfully transition
to independence. Many spinco management teams include members who have served as executives at the former parent company. In many cases, these are managers who served as division leaders who reported to the parent company CEO or CFO and are now ready to step into executive roles on their own. It is also common for between one and three members of the parent company board to agree to take seats on the spinco board to provide the new public company board with a source of the company’s history and culture to ensure a smooth transition. However, because of the competing fiduciary duties that these directors will face if they hold seats on both the parent and spinco boards, it is important for the spinco board to also have a majority of truly independent directors. Spinco directors who are former executive officers of the parent also must be aware that the stock exchanges and influential shareholder services firms such as Institutional Shareholder Services will not view them as being truly independent from a corporate governance standpoint for some time after the completion of the spin-off. This will inhibit their ability to serve on key board committees of the spinco.
5. Preparation of the Disclosure
Under the U.S. Securities and Exchange Commission’s rules, a spin-off of the shares of a subsidiary to a parent company’s shareholders does not involve the sale of securities by either the parent company or the subsidiary as long as the following conditions are met: (i) the parent company does not provide consideration for the spun-off shares; (ii) the spin-off is pro rata to the parent company shareholders; (iii) the parent company provides adequate information about the spin-off and the subsidiary to its shareholders and to the trading markets; and (iv) the parent has a valid business purpose for the spin-off.
To meet the adequate public information requirement, parent companies are required to prepare and disseminate detailed “information statements” that effectively look like initial public offering registration statements for the spinco. These information statements are filed with the spinco’s Form 10 registration statement, which is required in order to register the spinco’s shares under the Securities Exchange Act of 1934 and to permit listing of such shares on a national securities exchange. The preparation of the spinco information statement can take up to three or four months and requires a great deal of effort and cooperation among the lawyers, the business leaders, the finance department, the human resources/employee benefits department and the auditors. In addition, under New York law, a spin-off of all or substantially all of a company’s assets may require a vote of such company’s shareholders, while under Delaware law, such a requirement is much less likely.
Thomas P. Conaghan: +1 202 756 8161 tconaghan@mwe.com Jeffrey Rothschild: +1 212 547 5340 jrothschild@mwe.com
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Key Tax Considerations in Spin-Offs
A critical consideration in the disposition of any business is the tax cost. If properly structured, a disposition structured as a spinoff can be tax free to both the distributing corporation and its stockholders, while at the same time permitting the distributing corporation to pay down debt or buy back its stock, which otherwise would utilize the company’s cash. In contrast, federal and state corporate tax in excess of 40 percent (depending on the state) is imposed on a more straightforward sale by a corporation of a business unit. The stockholders also are subject to tax if the corporation distributes the proceeds as a dividend or in redemption of some of its stock. Numerous requirements must be satisfied to obtain the tax-advantaged treatment of a spin-off at both the corporate and stockholder level. This article sets forth some of the more critical tax considerations associated with a spin-off transaction. Of particular note, the Internal Revenue Service (IRS) recently announced that it will no longer provide rulings on certain critical aspects of spin-off transactions, a move which may leave taxpayers with less certainty than desired regarding the tax consequences when engaging in such a significant transaction.
Legal Opinion or Private Letter Ruling
A threshold question for any corporation undertaking a spin-off transaction is whether to obtain a tax opinion from counsel or seek a private letter ruling from the IRS. The stakes are usually very high. If the distribution of the stock of the controlled corporation does not qualify for tax-free treatment, the distributing corporation pays tax on the gain, and the recipient stockholders are taxable on the receipt of the controlled corporation stock. Often the gain inherent in controlled corporation stock is significant. Additionally, although the dividend to the stockholders generally should qualify for the lower qualified dividend rate, the stockholder generally will not be able to offset the gain with any basis the stockholder may have in the stock of the distributing corporation. Further, because a spin-off transaction is generally not coupled with a liquidity event, there is no cash generated in the transaction to fund the resulting income taxes.
The decision whether to obtain a ruling often is dictated by time constraints and the level of certainty required. If the distributing corporation is publicly traded, a ruling may be required. Even if a tax opinion is the chosen route, there often may be specific issues for which a ruling is sought, either because a legal opinion at the desired level is not feasible or the issue is one on which the IRS will rule but for which it is difficult to render an opinion. Similarly, in most cases where a ruling is obtained, one or more tax opinions also are obtained because there are certain issues on which the IRS will not provide a ruling (for example, the IRS will not issue a ruling that the spin-off satisfies the business purpose requirement). Unfortunately, recent IRS guidance expands the ®
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list of issues for which the IRS will not provide a ruling, resulting in less certainty available to taxpayers. Further, although recently the IRS sought to provide spin-off rulings in 10 weeks (provided the taxpayer complied with certain requirements, including timely providing information to the IRS), the IRS recently abandoned the 10-week program, leaving the timing of an IRS ruling more uncertain.
Pre-Transaction Restructuring
In most cases, the separation of one or more businesses in a spinoff transaction requires significant restructuring to align the separate businesses. These restructuring transactions often involve multiple legal entities, both U.S. and non-U.S., which often operate both the distributing and controlled businesses. The separation of these businesses raises issues under U.S. and nonU.S. tax law. For example, a U.S. parent corporation may have an international structure with a single operating subsidiary in each of the relevant jurisdictions. If each of these entities operates both the distributing and controlled businesses, the businesses must be separated from each legal entity prior to the spin-off. Often it is desirable to form a new subsidiary to hold the separated business. However, the legal, tax and regulatory regimes in each of these jurisdictions must be carefully analyzed, in addition to U.S. tax issues. One transaction that often occurs in connection with a spin-off may raise what has become known as a “north-south” issue. Simply put, this transaction involves the contribution of certain assets to a subsidiary (the south portion), in conjunction with a distribution of property, generally stock of a lower-tier subsidiary from the recipient corporation (the north portion). The concern is that the properties are treated as transferred in exchange for one another, creating an unintended taxable event. Historically, the IRS provided comfort to taxpayers via private letter rulings that the north and south transaction would not be integrated to create a taxable event, provided that the taxpayer was able to make certain representations. However, effective for 2013, the IRS announced that it would no longer provide rulings on this issue. Thus, taxpayers are left with more uncertainty as to the treatment of these critical pre-spin-off transactions and likely will seek advice of counsel. For many spin-offs, the pre-transaction restructuring steps garner the most time and cost, particularly the restructuring steps involving non-U.S. businesses. Companies considering a spinoff should create an efficient work plan early in the process to manage the restructuring steps, utilizing the correct team of advisors to assist in the process.
Capital Structure
One of the requirements for a tax-free spin-off is that the distributing corporation must distribute “control” of the controlled corporation. Control is defined as stock constituting 80 percent of the voting stock and 80 percent of all other classes www.ACGChicago.com3
of stock. If the distributing corporation owns less than 80 percent of the overall value of the stock of the controlled corporation, it often can recapitalize shortly before the transaction to achieve the requisite 80 percent ownership by using high-vote/low-vote stock. Generally, nothing precludes converting the stock back to a single class of voting stock. Notwithstanding the “temporary” nature of the “control,” the IRS generally has blessed this approach in private letter rulings, notwithstanding that it may have been difficult for counsel to provide a tax opinion at the desired level. This is no longer the case.
The IRS announced in early 2013 that it would no longer rule on whether the control requirement is satisfied if, in anticipation of the spin-off, (i) the distributing corporation acquires control of the controlled corporation in any transaction involving an exchange of higher-vote stock for stock with lesser voting power, or (ii) the controlled corporation issues stock with a different voting power per share than the stock held by the distributing corporation. As a result, the certainty that taxpayers historically could obtain from the IRS has been significantly limited, and taxpayers likely will rely on advice of counsel to determine whether these transactions will be respected in connection with the spin-off.
Establishing the capital structure of the distributing and controlled corporations is critical. It is often desirable for the distributing corporation to retire a portion of its outstanding debt securities by transferring certain debt securities of the controlled corporation to its security holders. These debt-for-debt exchanges can be structured to be tax-free to the distributing corporation. Under current law, these debt-for-debt exchanges can be accomplished in a tax-efficient manner without regard to the tax basis the distributing corporation has in the stock of the controlled corporation; however, there have been legislative efforts to limit this type of exchange. Often the debt-for-debt exchange utilizes a financial intermediary that purchases the distributing corporation’s debt on the public market, receives the controlled corporation’s debt securities in exchange for the newly purchased distributing corporation securities, and sells the controlled corporation’s debt securities on the public market. These transactions raise a number of technical questions under the spin-off rules. In recent years, the IRS provided guidance in private letter rulings that permitted these transactions on a taxfree basis, including permitting the new issuance of distributing corporation debt prior to, and in contemplation of, the spin-off, provided the taxpayer could demonstrate certain facts and make certain representations. However, in early 2013, the IRS announced that it would no longer rule on the tax-free nature of a distribution of controlled corporation debt securities in exchange for distributing debt securities, if the distributing debt securities are issued in anticipation of the spin-off. However, it is believed that the IRS will continue to rule on transactions in which financial intermediaries acquire distributing debt securities from third parties and then such securities are exchanged for debt securities of the controlled corporation. www.ACGChicago.com 4
Tax Sharing/Matters Agreements
In connection with a spin-off, it is common for the distributing and controlled corporations to enter into an agreement that governs the responsibility for taxes. This agreement is commonly referred to as a “tax sharing agreement” or “tax matters agreement.” The label “tax matters agreement” often is chosen to avoid having two key spin-off agreements (the transition services agreement and the tax sharing agreement) with the acronym TSA. The agreement generally governs the responsibilities and rights of the parties following the spin-off with respect to known tax liabilities, unknown/contingent tax liabilities, tax return preparation and filing, tax audits, tax controversies and tax attribute utilization. In addition, the agreement generally prohibits certain post-transaction acts that could jeopardize the intended tax-free nature of the spin-off.
Many different approaches have been adopted. For example, if the businesses historically have been separately operated in separate corporate entities, it is often the case that the distributing and controlled corporations each will assume the tax liabilities associated with their respective businesses, and in turn, retain power over tax returns, audits and controversies related to those liabilities. However, where businesses have been historically operated as divisions of a single corporation, it is not uncommon to see an agreement that assigns all historic liabilities to the distributing corporation (particularly if the distributing corporation is larger), with the distributing corporation maintaining control of tax returns, audits and controversies (generally with input and cooperation of the controlled corporation). In many cases, the end result falls somewhere in between these two approaches. Companies engaging in a spinoff should recognize that they will have to live, often for many years, with the agreement they adopt. Thus, careful consideration should be given to the level of granularity of the agreement. While it is often tempting to attempt to solve any potential issue that could arise, in many cases this is not practical and results in the companies having far more interaction than desirable or anticipated at the time of the spin-off. The process of drafting an agreement can become contentious (even though the companies are not yet separated) if there are clear divisions within the company advocating for each of the soon-to-be-separated companies. However, often conflict can be avoided with an initial understanding that the goal of the agreement is to maximize stockholder value and consistency with other intercompany agreements (e.g., the separation and distribution agreement).
Sales in Connection with Spin-Offs
In many cases, the rationale for a spin-off is that holding disparate businesses does not maximize investment return under a single corporate structure. For example, a single corporation may operate a high-growth international business and simultaneously operate a more mature U.S. business with stable cash flows but ®
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lower growth opportunities. The separation of the businesses is often believed to maximize the prospects (and, in turn, the stock trading price in the case of public companies) for each. In many cases, one or both of the distributing or controlled corporations may be attractive to potential acquirors. Section 355(e) prevents the avoidance of corporate-level tax for dispositions of 50 percent or more of the distributing or controlled corporation stock that are undertaken as part of the same plan that includes the spin-off. The rationale for this rule is to prevent corporations that desire to sell a business from undertaking a spin-off in order to avoid the corporate-level tax. The regulations under section 355(e) contain a number of factors that are used to determine whether a sale is part of the plan that included the spin-off. In addition, the regulations contain certain safe harbors that can be satisfied to avoid the application of section 355(e). The regulations contain a presumption that a sale is part of the same plan that includes the spin-off if the sale occurs within two years of the spin-off. The taxpayer must rebut this presumption through factual proof that no such plan existed. Companies engaging in a spin-off should carefully consider those facts that could be subsequently used to show the existence or absence of a “plan,” including any level of discussion of a potential sale. Similarly, companies considering the acquisition of a target that was recently part of a spin-off (i.e., within the previous two years) should carefully consider the application of section 355(e) and the possibility of inheriting certain tax liabilities associated with the spin-off. Note that the IRS will not provide a ruling as to whether a sale of the distributing or controlled corporation is part of the same plan that includes a spin-off. Robert A. Clary, II: +1 312 984 3251 rclary@mwe.com Jeffrey C. Wagner: +1 312 984 6489 jwagner@mwe.com
Trademark, Domain Name and Other IP Considerations in Spin-Offs
searches to confirm that the proposed name is available to the spinco, both for its use as a trademark, meaning free from serious risk of objection by third parties, and for registration at the U.S. Patent and Trademark Office. In addition, in order to further differentiate itself from the former parent company, the spinco may wish to consider adopting a new design/logo and slogan/tagline, for which searches also should be conducted and reviewed by trademark counsel. If the spinco plans to conduct business activities outside the United States, similar trademark searches should be carried out in those jurisdictions. Finally, the spinco should confirm that the new name is available for registration as a domain name and, if the spinco is a public company, that any proposed stock ticker be cleared prior to filing or registering with the U.S. Securities and Exchange Commission.
Will the spinco use or “share” the former parent company’s name or other trademarks/service marks/logos?
If the spinco will use the former parent company’s name or some version of it in its name or in its branding strategy postseparation, the parties must agree on the details regarding such use. For example, will the former parent company assign certain brand rights to the spinco, or will it retain ownership and permit the spinco to use its marks through a license? Will any limitations be placed on the spinco’s post-separation rights? For example, can the spinco use trademarks that are the same as or similar to the former parent company’s marks? Will the spinco be prohibited from or restricted to certain goods or services, fields of use, or geographic or business areas? Written agreements must be in place to clarify the spinco’s use of the former parent company’s name and other brand-related assets in order to help avoid post-separation misunderstandings about, and misuse of, the parent former company’s brands.
If the spinco will not use the former parent company’s name, trademarks/service marks/logos or other brand-related assets, what When planning for a spin-off, companies should address transition period for current usage is important trademark, domain name and related intellectual property (IP) matters alongside the myriad other matters involved appropriate?
in this complex type of transaction. The parties (the former parent company and the spin-off company, or spinco) should consider the following questions and implications.
Will the spinco have a new name/branding strategy post-separation?
If the spinco will have a new name or branding strategy, it is critically important to engage trademark counsel early in the process, in addition to confirming that the new name is available for registration as a business or trade name with the secretary of state in each state in which the spinco will conduct its business post-separation. Counsel will conduct and analyze trademark ®
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The parties should coordinate early in the separation planning to assess what transition period and post-separation “sunset” license(s) will be feasible. They should consider, for example, whether the spinco will need to sell off existing inventory, use up printed materials (marketing collateral, letterhead, business cards, etc.), replace stamping machinery and change signage anywhere the parties currently conduct business. The parties also should consider whether, and under what conditions, the spinco will need to share a common website or landing page for some period of time post-separation. As with any post-separation brandsharing arrangements, written transition agreements specifying the terms and conditions of all transition-related uses should be in www.ACGChicago.com5
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â&#x20AC;&#x153;Though it wonâ&#x20AC;&#x2122;t happen overnight, we believe healthcare will become more consumer-driven. We see a gradual shift QV \PM _Ia MUXTWaMZ[ LMTQ^MZ \PQ[ JMVMĂ&#x2026;\¸QV I UIVVMZ \PI\ parallels the evolution of employer-sponsored retirement plans.â&#x20AC;? Q. Thereâ&#x20AC;&#x2122;s a school of thought that says 2013 could mark a turning point for employer-based insurance coverage. That is, employers may turn to private Insurance Exchanges to cover employees and, ultimately, transition out of providing healthcare insurance altogether. After providing insurance for employees for the past 70 years, could this actually happen? Magas: <PW]OP Q\ _WVÂź\ PIXXMV W^MZVQOP\ _M JMTQM^M PMIT\PKIZM _QTT JMKWUM UWZM KWV[]UMZ LZQ^MV ?M [MM I * OZIL]IT [PQN\ QV \PM _Ia MUXTWaMZ[ LMTQ^MZ \PQ[ JMVMĂ&#x2026;\¸QV I UIVVMZ \PI\ XIZITTMT[ \PM M^WT]\QWV WN MUXTWaMZ [XWV[WZML ZM\QZMUMV\ XTIV[ .WZ M`IUXTM QV \PM ZM\QZMUMV\ [XIKM MUXTWaMZ[ [PQN\ML \PM J]ZLMV WN N]\]ZM TQIJQTQ\QM[ WV\W MUXTWaMM[ I[ \PMa \ZIV[Q\QWVML NZWU I LMĂ&#x2026;VML JMVMĂ&#x2026;\ WZ I \ZILQ\QWVIT XMV[QWV XTIV \W I LMĂ&#x2026;VML KWV\ZQJ]\QWV WZ S 6W_ _M M[[MV\QITTa PI^M I LMĂ&#x2026;VML JMVMĂ&#x2026;\ QV MUXTWaMZ [XWV[WZML PMIT\PKIZM QV[]ZIVKM <PM LZI_JIKS Q[ \PI\ MUXTWaMZ[ WN\MV JMIZ \PM JZ]V\ WN XZMUQ]U QVKZMI[M[ _PQTM MUXTWaMM[ OM\ TQUQ\ML XTIV WX\QWV[
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â&#x20AC;&#x153;When determining whether to lend, weâ&#x20AC;&#x2122;re careful to factor QV XW\MV\QIT KPITTMVOM[¸_PM\PMZ QV ZMQUJ]Z[MUMV\ WZ delivery of care. And that has made us especially sensitive to the quality of the management team at the helm.â&#x20AC;? 9 ,MĂ&#x2026;KQ\ ZML]K\QWV IVL [MY]M[\ZI\QWV IZM \PM buzz words in D.C. these days, and their impact on the healthcare sector could be profound. Will such efforts hurt or help the delivery, accessibility, cost and quality of healthcare? Browne: 4W_MZQVO KW[\[ _PQTM QUXZW^QVO Y]ITQ\a PI[ IT_Ia[ JMMV \PM QVL][\ZaÂź[ 0WTa /ZIQT =T\QUI\MTa \PM XZM[[]ZM NZWU I LMĂ&#x2026;KQ\ [\IVLXWQV\ Q[ PMZM \W [\Ia JMKI][M \PM KW[\ WN \PM M`Q[\QVO [a[\MU Q[ ]V[][\IQVIJTM
Magas: =VLMZ [MY]M[\ZI\QWV _MÂź^M ITZMILa [MMV I IKZW[[ \PM JWIZL K]\ NWZ XZW^QLMZ[ \PI\ \WWS MNNMK\ )XZQT [\ ?M LWVÂź\ PI^M I TW\ WN \IVOQJTM ZM[]T\[ aM\ IVL \PM ?M [MM \PM ZQ[M WN XZQ^I\M M`KPIVOM[ \PI\ NWK][ WV MUXTWaMZ[ <PM[M IZMVÂź\ \W JM KWVN][ML _Q\P \PM [\I\M JI[ML QVLQ^QL]IT XPa[QKQIV UQOP\ VW\ M^MV VW\QKM Q\ J]\ QV TIZOMZ WZOIVQbI\QWV[ _PMZM 5MLQKIZM IKKW]V\[ NWZ I [QOVQĂ&#x2026;KIV\ OW^MZVUMV\ Z]V M`KPIVOM[ _PQKP \IZOM\ \PM ]VQV[]ZML IVL [UITTMZ MUXTWaMZ[ 8ZQ^I\M M`KPIVOM[ IZM IQUML I\ \PM XIZ\ WN \PM XI\QMV\ ^WT]UM \PM QUXIK\ KW]TL JM [QOVQĂ&#x2026;KIV\ UQL [QbML MUXTWaMZ UIZSM\ IVL _W]TL WXMZI\M [QUQTIZ \W I LMĂ&#x2026;VML KWV\ZQJ]\QWV XTIV ÂŽ
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Fifth Street Finance is a leading alternative asset manager with deep expertise in the healthcare vertical. Publicly listed on the NASDAQ under the [PJRLY -:* -PM[O :[YLL[ YHURZ HTVUN [OL [VW Ă&#x201E;]L Business Development Companies (BDCs) based on its market capitalization of over $1 billion.
Beecken Petty Oâ&#x20AC;&#x2122;Keefe & Company is a ChicagoIHZLK WYP]H[L LX\P[` THUHNLTLU[ Ă&#x201E;YT MV\UKLK PU 1996 to invest in middle-market buy-out transactions, recapitalizations, and growth platforms in the healthcare industry. www.bpoc.com
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Mastering the Art of Deal Making
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The 14th Annual Midwest ACG Capital Connection
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