Chicago-based private equity firm Prospect Partners has invested an undisclosed amount in Lawrence, Kansas-based SurePoint Medical. The management-led recapitalization is Prospects Partners’ first investment from its $200 million third fund. Formed in 2006, SurePoint Medical provides mail-order diabetes supplies. Prospect Partners focuses on lower-middle-market investments and manages $470 million across its three funds.
Chicago-based Prospect Partners, LLC, a leading private equity firm
investing in smaller lower-middle-market companies, has closed its first deal of its new $200 million third fund: SurePoint Medical, LLC, of Lawrence, Kansas, a nationwide provider of mail-order diabetes supplies. The transaction, a management-led recapitalization, is Prospect Partners’ second specialty healthcare services investment in the last five months.
Founded in 2006, SurePoint Medical offers direct-to-consumer diabetes supplies and services that help people maintain their treatment regimen and control their diabetes. SurePoint simplifies disease management by providing home delivery of over-the-counter products like glucose meters, test strips, lancets, insulin pumps, and, through its fully-licensed pharmacy, prescribed drugs such as insulin. SurePoint also works with physicians and insurance providers to oversee medical compliance and reimbursement. The company serves primarily private-pay Type 1 and Type 2 diabetics.
About 23.6 million people — nearly 8 percent of the U.S. population — are believed to have diabetes, with 1.6 million new cases diagnosed each year in those aged 20 years and older, according to the American Diabetes Association. In the U.S., the total cost of diagnosed diabetes is $174 billion.
“Diabetes is a big problem that is only getting worse,” said Louis Kenter, a Founding Principal at Prospect Partners. “SurePoint is a rapidly growing company that, in a short time, has built a strong position in a fragmented, but high-growth, market. The company is run by an exceptional management team that understands diabetes management, can navigate healthcare insurance, and places an emphasis on customer service. We are excited about SurePoint’s potential for continued growth.”
Prospect Partners Makes First Investment of Fund III; Recapitalizes SurePoint Medical, SurePoint is led by Gordon Roll, President; Greg Schreck, Chief Operating Officer; and Steve Jalowiec, Executive Vice President.
“Prospect Partners brings a wealth of experience in helping niche growth companies like ours successfully reach the next level of their business,” said Mr. Roll. “We look forward to the firm’s support as we invest in internal growth, scale our offering, and deepen our penetration.”
Going forward, SurePoint will consider select acquisitions of mail-order suppliers of diabetic and other related healthcare supplies and services.
Serving the holding company, SurePoint Holdings, LLC, from Prospect Partners are Mr. Kenter, as Chairman, and Vice President Brad O’Dell, as Director.
Prospect Partners closed its third private equity fund in August, 2010. Like its predecessors, Prospect Partners III, L.P. targets management-led leveraged recapitalizations and acquisitions of niche market leaders that generate revenues typically under $75 million. The firm backs strong management teams of well-positioned, U.S.-based companies in a broad range of specialty manufacturing, distribution, and service industry segments.
Prospect Partners’ other healthcare investments include Navix Diagnostix, Inc., an outsourced cardiovascular diagnostic services provider that Prospect Partners recapitalized with management last summer; medical billing services provider Marina Medical, Inc.; and behavioral services provider Remuda Ranch Company.
About Prospect Partners, LLC
Prospect Partners is a leading private equity firm investing in smaller lower-middle-market companies, managing $470 million in three funds. A highly experienced, active, and committed investor, Prospect Partners focuses exclusively on management-led leveraged recapitalizations and acquisitions of niche market leaders with revenues typically between $10 million and $75 million. Since its inception in 1998, Prospect Partners has invested opportunistically nationwide in nearly 80 companies within a broad range of niche manufacturing, distribution, and specialty service markets. Based in Chicago, Prospect Partners also has an office in Menlo Park, Calif. www.prospect-partners.com