13 03 29 longhornarticle ma_magazine
TRANSCRIPT
MERGERS & ACQUISITIONS April 2013
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Longhorn Deal Spotlights Healthcare Trend M&A abounds as more patients are recovering in a “medical home” rather than a hospital
BY ANTHONY NOTO
Longhorn Health Solutions Inc.,
a provider of consumable medical
supplies and equipment, already
has a strong presence in Texas,
but there's still a large portion of the market share
remaining, says Satori Capital's co-founder Sunny
Vanderbeck, the company's newest owner.
Longhorn brings disposable medical products-
incontinence supplies, diabetes strips and specialty
foods-to the homes of Medicaid, Medicare and
privately insured patients. The company distributes
the supplies in vans dispatched from its 10
warehouses (pictured) located across Texas: Austin,
Houston, Beaumont, San Antonio, El Paso, Fort
Worth, Corpus Christi, Harlingen, Lubbock and
Waco. It recently launched a pharmacy division so
that it can deliver medication
as well.
"It's the future," says Brent
Earles of investment bank
Allegiance Capital Corp. who
ran the sale process for
Longhorn alongside fellow
adviser Fred McCallister.
More clients, they say, are banking on the notion that
more patients are recovering in a "medical home"
rather than a hospital.
"There's certainly an interest in this space, not just in
Texas but across the country."
"We started the marketing effort in early- to mid-
April," Earles adds, with about two-thirds of the
interested bidders being outside of Texas. About 40
companies expressed serious interest, he says, with
60 percent being private equity firms.
In the end, Longhorn founder and chief executive
Britt Peterson connected with Vanderbeck and "the
classic PE deal appealed to
him," McCallister says.
Terms of the deal, announced
on Feb. 20, were not
disclosed, but Satori generally
makes investments that hover
between $25 million and $75
million.
Under Satori's ownership, Longhorn will focus on
organic growth in the near term, but add-on
acquisitions will serve as a way for the company to
eventually grow in other states, Vanderbeck explains.
"We haven't made any investments in healthcare," he
adds. "What we saw here was a great services
company in healthcare."
Prior to Satori, Vanderbeck co-founded and served as
chief executive of Data Return, a provider of
managed services and utility computing. Before that,
he worked at Microsoft Corp. (Nasdaq: MSFT).
Fred McCallister
Allegiance Capital
Brent Earles
Allegiance Capital