Welsh, Carson, Anderson & Stowe (the “Firm” or “WCAS”), a private equity
firm exclusively focused on information/business services and
healthcare, announced that it has completed the sale of its portfolio
company, Matrix Medical Network (“Matrix” or the “Company”), to the
Providence Service Corporation (Nasdaq: PRSC) for an aggregate purchase
price of $400 million, including $360 million in cash and shares of
Providence common stock with a value at closing of $40 million. The WCAS
equity investment in Matrix Medical generated a total gain $213 million,
representing a 3.1 times investment multiple and a 46% internal rate of
return.
WCAS acquired Matrix Medical in September 2011, having identified the
deal through the Firm’s “map-and-attack” sourcing strategy. Matrix is a
leading provider of prospective medical assessments to Medicare
Advantage plans. The Company utilizes a captive provider network of over
600 nurse practitioners to provide onsite medical evaluations and
document member diagnoses in 33 states. The Matrix value proposition for
customers includes revenue management, enhanced care optimization as
well as increased compliance and improved quality of patient care.
Under WCAS’s ownership, Matrix was led by CEO, Randy Dobbs, a repeat
WCAS CEO and former WCAS Senior Industry Executive. WCAS and Randy
successfully hired over 20 senior managers, who previously worked at a
WCAS portfolio company. In addition, several key members of the
management team were recruited from large healthcare companies.
Over the last few years, Matrix Medical focused on several major
operating initiatives: (i) increasing production capacity to meet
growing customer demand, (ii) implementing management team metrics and a
dashboard to drive visibility, process improvements and accountability,
(iii) continuing to drive operational improvements and (iv) developing a
long-term strategic plan to diversify the Company’s service offering.
Matrix Medical has generated three-year revenue and Adjusted EBITDA
CAGRs of over 45% and 75%, respectively.
“I have enjoyed working with WCAS to build Matrix Medical over the last
several years.” said Randy Dobbs, former CEO of Matrix Medical. “We are
proud of the operational growth that Matrix Medical achieved and believe
that the Company is well positioned as a market leader.”
WCAS has been capitalizing on the attractive market environment this
year, completing four portfolio company sales (GlobalCollect, Solstas
Lab Partners, Peak 10 and Matrix Medical) and two initial public
offerings of Paycom Software, Inc. (NYSE: PAYC) and K2M Group Holdings,
Inc. (Nasdaq: KTWO). Including pending transactions, WCAS has generated
distributions to investors of $5.5 billion since the beginning of 2013.
This has resulted in WCAS’s investors receiving $5.42 of distributions
for every $1 of capital called.
About Welsh, Carson, Anderson & Stowe
Welsh, Carson, Anderson & Stowe focuses its investment activity in two
target industries, information/business services and healthcare. Since
its founding in 1979, the Firm has organized 15 limited partnerships
with total capital of $20 billion. The Firm is currently investing an
equity fund, Welsh, Carson, Anderson & Stowe XI, L.P. See www.welshcarson.com
to learn more.
Copyright Business Wire 2014