Welsh, Carson, Anderson & Stowe has invested in Emerus Holdings. Financial terms weren’t announced. CORRECTION: Austin Ventures, which invested $30 million in 2011, has sold its remaining stake in Emerus and is completely divested, said Jason Lisovicz, Emerus’ VP of marketing. Welsh Carson now owns a minority of Emerus. The firm acquired a much bigger stake than that held by Austin Ventures. Sellers, in addition to Austin, include six Emerus founders and 23 minor investors, Lisovicz said. Woodlands, Texas-based Emerus is a hospital system that provides inpatient and diagnostic care. BofA Merrill Lynch advised Emerus.
HOUSTON, Sept. 1, 2015 /PRNewswire/ — Emerus Holdings, a national and innovative leader in the delivery of emergent, inpatient and diagnostic care in partnership with leading health systems, today announced it has signed a definitive agreement to receive a strategic investment from Welsh, Carson, Anderson & Stowe (Welsh Carson), a leading health care investment firm.
Emerus partners with health systems to bring high-quality, patient-centric acute episodic and ambulatory clinical services to communities across a given market, helping patients by positioning best-in-class provider services in the communities where they work, live and play. Emerus’ proprietary, analytical-based market strategies offer health systems the opportunity to fill access gaps in their markets in a capital-efficient manner. By identifying, developing and managing improved-access and operationally efficient medical facilities throughout the United States, Emerus offers scalable-growth opportunities while maintaining patient satisfaction scores that rank above the 90th percentile, nationally.
“Welsh Carson has a successful track record of building market leaders through its partnerships with health care companies and health care providers such as US Anesthesia Partners, United Surgical Partners, US Oncology, Select Medical and many others,” said Dr.Toby Hamilton, CEO of Emerus. “It is a firm that shares our values, and we are excited to move forward with such an experienced capital partner.”
The agreement between Welsh Carson and the management of Emerus provides additional capital for Emerus to expand its business operations and continue to partner with health systems across the nation. It also provides for the creation of an $11 million charity fund, which is being established to benefit the communities throughout the Emerus network of facilities.
The new organization will be led by the current management team of Emerus and will continue its focus on healthcare innovations and community-based, patient-centered health care facilities.
“As we talk with health systems across the country, we continue to hear of their need to fill access gaps and expand their network of branded clinical services into the communities they serve while also being disciplined with the deployment of capital. We believe Emerus is a natural and experienced partner and solution for these systems – they are extremely strong operationally, clinically and financially.” said Scott Mackesy, co-head of health care industry investments for Welsh, Carson, Anderson & Stowe. “Through the development and management of these healthplex facilities, Emerus provides venues for national health care brands to offer multiple centers of excellence in a smaller campus setting.”
Emerus has quickly expanded its footprint in metropolitan areas across the country with leading health system partners includingBaylor Scott & White Health, Baptist Health System, SCL Health, and Trinity Mother Frances with more than 20 additional locations currently under development in both new and existing markets.
In 2011, Emerus negotiated initial growth capital with Austin Ventures. Upon execution of the equity partnership between Welsh Carson and Emerus Holdings, Austin Ventures, Emerus’ valued equity partner will divest its position in Emerus.
BofA Merrill Lynch acted as exclusive financial adviser to Emerus in connection with the transaction.
Emerus is a nationally recognized leader in the delivery of compassionate, high-quality inpatient, and diagnostic care. Its distinctive level of care that includes streamlined admitting procedures, highly qualified physicians and innovative diagnostic equipment earned Emerus the 2014 Guardian of Excellence Award for Superior Patient Experience. Emerus specializes in the identification, development and management of improved-access and operationally efficient medical facilities throughout the United States. Its community-based approach prioritizes limited inpatient stays, efficient emergency rooms and cost-effective pricing in a smaller campus setting. Emerus has more than 1,000 employees, with expert concentrations in over 20 different fields throughout the medical industry. More information is available at www.emerus.com.
ABOUT WELSH, CARSON, ANDERSON & STOWE
Welsh, Carson, Anderson & Stowe focuses its investment activity in two target industries: healthcare and information/business services. Since it’s founding in 1979, the Firm has organized 16 limited partnerships with total capital of over $22 billion. Welsh Carson has invested over $7 billion in 80 healthcare companies, including many leading healthcare providers. Welsh Carson’s strategy is to partner with outstanding management teams and build value for the Firm’s investors through a combination of operational improvements, internal growth initiatives and strategic acquisitions. See www.welshcarson.com to learn more.
(A prior version of this post said that Austin Ventures was the seller. There were other shareholders that sold their stakes in Emerus. The story has been corrected.)