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Friedman Capital and Seal Rock Partners acquire KeySource

Friedman Capital and Seal Rock Partners have acquired Cincinnati-based KeySource Medical Inc, a generic drug distributor. No financial terms were disclosed.


Washington, DC (June 20, 2016) – Three founding fathers of the generic drug distribution industry are at it again. Randolph (Randy) Friedman, Jay Levine and Albert Paonessa III are seizing an opportunity to repeat past success by catering to clients in an industry whose dominance by massive companies has caused it to devolve into a low-cost race to the bottom. Today, Friedman’s firm, Friedman Capital, in partnership with Jonathan Z. Cohen and Edward E. Cohen through New York-based Seal Rock Partner and Stephanie Ring, former co-founder and CEO of Keysource Medical, announce that they have acquired KeySource Medical, Inc. of Cincinnati, OH.

The transaction positions three industry pioneers to re-enter the generic drug distribution business at a time when it faces a new wave of consolidation among distributors limiting service, access and relationships with independent pharmacies. These pharmacies still represent an $88.8 billion health care marketplace and dispense nearly 40 percent of all retail prescriptions, according to the National Community Pharmacists Association.

“KeySource offers an ideal platform to re-establish the hallmarks of the industry,” says Friedman. For manufacturers, these hallmarks include market access and price stability. Independent pharmacies and regional chains need an understanding partner willing to meet pricing, product and service demands.

“Given KeySource’s dedication to its customers and our proven ability to execute on past growth objectives, we see tremendous potential to gain significant market share. What’s more, our door is wide open for further acquisitions of like-minded distributors as both manufacturers and independent pharmacies seek alternatives to the current oligopoly that has little interest in their welfare,” Friedman added.

Friedman, along with Levine, cofounded The Harvard Drug Group in 1988, which they then grew from $3 million to $500 million in annual sales before the company was sold to a private equity firm. At the time of the sale, The Harvard Drug Group was the largest independently owned generic drug distributor in the U.S. Just a few years later, the company was purchased by Cardinal Health for $1.25 billion.

Paonessa was President of Anda, Inc. for over 10 years. During his tenure, the company enjoyed its greatest period of growth from approximately $700 million to over $2 billion in sales. Presently, Anda is the country’s largest generic drug distributor by volume.

Stephanie Ring, the cofounder of Keysource, will continue as a major shareholder and Board member of the acquiring company. She handpicked the Friedman team to buy her thriving business. “I wanted to feel confident that I was leaving the integrity of the brand that Dennis Engel and I built over 20 years ago in capable and caring hands. My selection of this group will allow my existing team to continue to grow under experienced industry leadership and I’m looking forward to seeing where we can all take this together.”

“A key part of the value add here is the management team already in place at KeySource Medical,” offers Levine. The management team includes CEO Todd Szewc, a leader who sits on the Board of the Healthcare Distribution Alliance. He is joined by industry veterans Dave Hoffman and Steve Cochrane.

Together, the three have over 60 years of experience in the generic drug distribution industry. “Todd Szewc, at the helm of KeySource, has an amazingly bright future. Randy, Al and I are excited to help him, Dave and Steve climb to new heights,” says Levine.

Bill Fradin, Partner at Seal Rock Partners, said, “Backing Randy, Jay and Al proved irresistible. They are true power-players in the generic drug distribution industry. With Jonathan and Edward Cohen at our side, we have the platform to recreate their success. As the first transaction for Seal Rock Partners, we hope to continue Jonathan and Edward’s track record of tremendous success as evidenced in the recent sales of Atlas Energy and Resource America.”

About KeySourceMedical, Inc.
KeySource Medical, Inc. (KMI) has been supplying the generic pharmaceutical needs of retail pharmacies across the United States since 1996. KMI’s sales force is focused on serving the interests of our customers, emphasizing the highest level of service, integrity and value. A trusted wholesale distributor of generic pharmaceuticals, KMI takes responsibility to safeguard the integrity of the pharmaceutical supply chain seriously, securing it against counterfeit or adulterated products. For more information, please visit

About Seal Rock Partners
Seal Rock Partners is the private equity investment arm of Jonathan and Edward Cohen, partnering with Bill Fradin to acquire and build lower middle market businesses. They and their co-investors leverage the Cohen family’s long history of success as investors and business leaders in companies such as Atlas Energy, Atlas Pipeline Partners, Resource America, Jefferson Bank, State National Bank of Maryland, Fidelity Leasing, The Richardson Company, and others. For more information, please visit

About Friedman Capital
Friedman Capital is a Washington D.C. based, family-owned investment firm focused on control and significant growth capital investments in the North American Distribution and Healthcare Services industries. Founded by brothers Randolph (Randy) and Dean Friedman, the firm invests in opportunities where they can leverage their sector knowledge and deep operational expertise to add value. For more information, please visit