Published in Health Care

Chicago PE firm acquires majority stake in Grand Rapids health care auditing company

BY Sunday, January 14, 2018 07:31pm

GRAND RAPIDS — SpendMend LLC, a company that provides spending visibility and audit and recovery services to the health care industry, sold a majority stake to Chicago-based private equity firm s.

The recapitalization and investment from Sheridan Capital, which invested along with SpendMend’s founders and managers, will support the continued growth of the company.

Terms of the deal were not disclosed, although SpendMend’s founders and managers retained “a meaningful ownership stake in the business,” according to an announcement of the investment.

“Through our partnership with the Sheridan team, we look forward to accelerating the growth of SpendMend and further developing our capabilities and overall value proposition as it relates to the healthcare industry,” stated SpendMend President Rob Heminger.
Miller, Johnson, Snell & Cummiskey PLC served as the legal adviser for SpendMend, which worked with Grand Rapids-based advisers Charter Capital Partners.

Sheridan Capital was advised by the law firm of Katten Muchin Rosenman LLP. Fidus Investment Corp. and Cadence Bank provided debt financing for the transaction.
“As the market leader in health care audit recovery, SpendMend’s services help health care executives, operators and providers navigate an increasingly challenging macro-economic environment of reimbursement pressure and rising organizational costs,” said Jonathan Lewis, managing partner at Sheridan Capital. “Cost containment is and will continue to be a high-priority focus in health care, and SpendMend plays a critical part in helping organizations find and establish long-term operational sustainability.”

Sheridan Capital Partners focuses on leveraged buyouts in the health care and consumer industry. It specializes in U.S. and Canadian companies with enterprise values between $25 million to $150 million.

“Sheridan’s sector focus and ability to bring both relevant experience and immediate value to our organization was undeniable,” stated SpendMend CEO Dan Geelhoed.

The majority recapitalization for SpendMend comes amid an active dealmaking period in the health care services industry. According to a report from PricewaterhouseCoopers, more than 200 health care deals were completed in the third quarter of 2017, the twelfth consecutive period above that benchmark. However, the number of deals and their collective value was down compared to the second quarter and on a year-over-year basis.

Only the health care services subsector — with $7.85 billion in deals — grew on a year-over-year basis when measured by deal value, according to PwC.

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