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FRANKLIN, Tenn. – Two leading private equity firms have made a significant
growth investment in Passport Health Communications, Inc., a Franklin,
Tenn.-based health care technology company. Passport offers health care
providers and payers a comprehensive suite of solutions to manage the revenue
cycle, enhancing the amount and timeliness of reimbursement and increasing
administrative and financial productivity.
Following the recapitalization, Spectrum Equity Investors and Great Hill
Partners will own a majority interest in Passport. Primus Capital Funds, which
led a recapitalization of the company in 2006, has rolled a majority of its
existing stake and has contributed additional equity alongside Spectrum Equity
and Great Hill. The senior management team, led by Chairman and CEO Jim Lackey,
will continue to retain a significant equity position in the company.
“Passport is pleased to complete this recapitalization to help launch our next
phase of growth,” said Lackey. “We are fortunate to be able to work with this
group of quality investors. Their collective experience and resources will allow
us to carry out our long-term business plan by making continued investments in
our products and services and by supporting acquisition opportunities.”
Mark Taber, a Partner at Great Hill, commented, “Passport represents an exciting
opportunity to capitalize on the favorable trends in the revenue cycle
management sector. We are excited to partner with management and to provide the
additional capital and resources to help Passport expand its product line and to
support further strategic opportunities.”
The transaction provided liquidity to long-term venture capital and angel
investors, as well as provided access to additional capital for investment in
new products and future acquisitions. Existing lenders Goldman Sachs Specialty
Lending Group and Ares Capital Corporation also participated in the equity
financing. The debt financing provided to Passport in May from Goldman, Ares and
Wells Fargo Foothill remains in place.
“Passport is a highly profitable, rapidly growing provider of health care
information technology services,” said Jim Quagliaroli, Principal at Spectrum
Equity Investors. “Given our focus on information service businesses and
specific investment experience in data communications and online services,
Passport is a terrific fit for us.”
In May Passport completed the acquisition of Nebo Systems, Inc., an Oakbrook
Terrace, Ill.-based provider of claims management technology and insurance
eligibility verification services. Nebo represented the company’s fourth
acquisition in the revenue cycle management sector.
As part of the recapitalization transaction, William Collatos and Jim
Quagliaroli of Spectrum Equity and Matthew Vettel and Mark Taber of Great Hill
will join Passport’s board of directors. Phillip Molner of Primus and Lackey
will remain directors of the company.
Brentwood Capital Advisors acted as Passport’s exclusive financial advisor in
the transaction. Latham & Watkins served as legal counsel for Spectrum Equity,
Goodwin Procter served as legal counsel for Great Hill Partners, and Waller
Lansden served as legal counsel for Passport.
About Passport Health
Passport Health Communications, Inc., Nebo Systems, Inc. and The Cosand Group, a
family of companies owned by Passport Holding Corporation, provide health care
technology to more than 5,300 hospitals, physician practices and other health
care providers in all 50 states. The companies deliver a range of
administrative, clinical and financial tools via real-time, batch and integrated
technology to improve the efficiency and accuracy of the revenue cycle process.
For more information, visit
www.passporthealth.com.
About Great Hill Partners
GHP is a private equity firm that manages over $2.5 billion in capital to
finance the expansion, recapitalization or acquisition of growth companies in a
wide range of sectors within the business and consumer services, media,
communications and software industries. GHP targets investments of $50 million
to $150 million. For more information, please visit
www.greathillpartners.com.
About Primus Capital Funds
Founded in 1983, Primus Capital Funds is a private equity firm that invests in
high-growth companies within the healthcare, business services, and for-profit
education industry sectors. Transaction types include management-led buyouts,
recapitalizations, and primary investments of growth capital. For more
information, please visit
www.primuscapital.com.
About Spectrum Equity Investors
Founded in 1994, Spectrum Equity Investors is a leading private equity firm
specializing in investments in profitable, growing service businesses throughout
North America and Europe. With offices in Boston and Menlo Park, Spectrum
currently manages over $4.0 billion in capital. For more information, please
visit
www.spectrumequity.com.
About Brentwood Capital Advisors
Brentwood Capital Advisors LLC, founded in 1999, is a privately held investment
bank headquartered in Nashville, Tennessee, providing mergers and acquisition
and capital raising advisory services to middle market healthcare and business
services companies. More information about Brentwood Capital Advisors can be
found at
www.brentwoodcapital.com.
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