Blue Wolf Capital to invest in Great Lakes Caring

Wellspring Capital Management is exiting Great Lakes Caring Home Health and Hospice after more than two years.

Blue Wolf Capital Partners is investing in the Jackson, Michigan, for-profit provider of in-home post-acute services for people with serious illnesses. Terms weren’t disclosed.

William Deary, who founded the company with his wife in 1994, is staying on as CEO. Great Lakes’s management also remains. Blue Wolf will have a majority of Great Lakes, while Deary is the largest individual shareholder, sources said.

The transaction represents the third time a private equity firm will own Great Lakes. Wellspring, the current seller, acquired Great Lakes in May 2014 from Pouschine Cook Capital Management.

“We really don’t see this as selling or being owned by an entity,” Deary told Buyouts. “We’re continuing to move forward as healthcare continues to evolve and healthcare in the home continues to become more and more prevalent.”

Buyouts reported the Great Lakes auction in September. Houlihan Lokey advised on the sale, the story said.

Great Lakes employs more than 2,600 people and serves more than 9,000 patients daily. This year, Great Lakes landed on the Inc. 5000 list of fastest growing private companies, ranking No. 4108, with $188.9 million in 2015 revenue.

Founded in 2005, Blue Wolf targets lower-middle-market companies. It typically invests $25 million to $250 million of equity per deal. Sectors include healthcare, forest and building products, aerospace and defense, niche manufacturing and distribution, as well as energy services.

Blue Wolf, New York, is considered a distressed investor, but the firm’s investment in Great Lakes is not distressed, said Adam Blumenthal, the firm’s managing partner.

“Great Lakes is a premier company in its industry,” he said. “What we’ve learned from investing in outpatient services and healthcare in general is that there is a great deal of inefficiency in healthcare, and companies like Great Lakes are positioned to fix [that]. It seems like a very appropriate investment to us.”

Blue Wolf used its third fund, which closed on $300 million in 2013, to invest in Great Lakes.

In May, Blue Wolf acquired National Home Health Care for about $103 million, press reports said. The firm also owns ModernMD and Brooklyn Hospital Center.

Mark Francis of Houlihan Lokey provided financial advice to Great Lakes. Greenberg Traurig served as Blue Wolf’s attorney. KPMG Transaction Advisory Group provided finance, accounting and tax advice.

Houlihan declined comment. Wellspring executives could not be reached for comment.

Action Item: To contact Blue Wolf, email Adam Blumenthal at adam@bluewolfcapital.com

Illustration courtesy ©iStock/losw