Middle-market buyout shop GI Partners has exited its investment in portfolio company Plum Healthcare Group. Bay Bridge Capital Partners acquired the company, which runs skilled nursing facilities and home health and hospice agencies. The sale generated a return of approximately three times invested capital for limited partners in GI Partners Fund II L.P., the firm said.
GI Partners (“GI”), a leading mid-market private equity firm, announced today the sale of its portfolio company, Plum Healthcare Group, LLC (“Plum”), one of the fastest growing companies in healthcare services, to Bay Bridge Capital Partners (“Bay Bridge”). The sale of Plum generated a return of approximately three times invested capital for limited partners in GI Partners Fund II L.P.
Plum’s current portfolio consists of 50 skilled nursing facilities and five home health and hospice agencies located in strategic geographic clusters throughout California, Utah, and Arizona. Known for its pre-eminent clinical care, Plum serves over 5,000 medically-complex patients every day. The company was acquired by GI Partners in 2006 and, during the firm’s six-years of ownership, has successfully acquired and turned around 39 skilled nursing facilities. By improving clinical quality and increasing staff across its facilities, Plum has achieved industry-leading patient outcomes and occupancy rates as well as significantly increased the mix of medically-complex residents it serves. Under GI’s stewardship, Plum has strengthened facility-level resources, clinical and administrative consulting services, and invested heavily in clinical quality and IT infrastructure. Plum has also diversified geographically by moving in to two additional states, and has developed new post-acute service lines by entering into the home health and hospice markets. As a result of these and other initiatives, Plum has grown revenue and EBITDA at a 32% and 30% compounded annual growth rate (“CAGR”), respectively, over the last five years.
Howard Park, a Managing Director of GI Partners, said, “We are extremely pleased with everything we were able to accomplish working closely with Plum management over the past few years, despite the challenging healthcare reimbursement environment. The unique human touch Plum brings to a healthcare services business has made it a rewarding investment. Our initial investments in clinical quality, staffing, infrastructure, IT, and key personnel have really positioned Plum to generate success over the next phase of growth that they are about to embark on with Bay Bridge. We look forward to closely following their future achievements.”
Since founding Plum in 1999, co-CEOs Mark Ballif and Paul Hubbard have been at the helm of Plum and will continue in this capacity under Bay Bridge’s ownership. Mark said, “Our partnership with GI demonstrates how investors and providers can come together to provide better patient care. We have been able to achieve outstanding performance by investing in great people and superior clinical systems. These make a huge difference in our patients’ lives.” Paul added, “GI helped us use our deep commitment to people and clinical excellence as a springboard to professionalize our unique approach and grow. It has been a pleasure to work with such fine people and thought-partners.”
Jefferies & Company, Inc. served as lead financial advisor to GI Partners and Plum on the transaction. Edgeview Partners also served as co-advisor to Plum. Paul Hastings LLP served as legal advisor to GI Partners and Plum.
About Plum Healthcare Group
Plum is a leading skilled nursing operator that provides a coordinated continuum of care for post-acute patients in 50 facilities and 5 home health and hospice agencies located in geographic clusters throughout California, Arizona and Utah.
About GI Partners
GI Partners, headquartered in Menlo Park, CA, is a private equity firm with approximately $8.5 billion of capital under management from leading institutional investors in the U.S., Europe, Asia and the Middle East. The firm primarily invests in asset-intensive, middle-market businesses and portfolios of assets located in North America. Key sectors of focus include specialist healthcare, IT infrastructure and services, asset-backed leisure and retail, and financial and real estate services. Across all of its investments, GI Partners seeks to identify operating companies with market leading positions and establish a partnership orientation with management to drive value creation and growth.