Thoma Cressey Backs Assistive Technology

Thoma Cressey Equity Partners launched Assistive Technology Group Inc. (ATGI) last month committing $20 million in equity to the venture, and thereby renewing its acquaintance with the management team from former portfolio company American Medserve.

ATGI plans to develop into a leader in the rehabilitative and assistive technology sector of the health-care industry, said Dave Mayer, a principal at Chicago-based Thoma Cressey. The company’s expansion initiative calls for the acquisition of smaller businesses within the sector. Broadly defined, rehabilitative and assistive technology includes prescribed devices that facilitate the comfort and quality-of-life for chronically and severely debilitated and disabled patients. To support this effort, Mayer said ATGI is currently seeking a $50 million senior debt facility with a bank that can increase the size of the loan as ATGI grows.

“Our niche is defined as $1 billion to $1.5 billion,” Mayer said. “The average company is $2 million to $5 million in size, so what will probably happen is we will enter the market through our reputation.

In its acquisitions, the company will seek to gain a foothold in select markets by acquiring a strong local provider and then expand within the region organically. Mayer said the first acquisitions could close within the next several weeks.

The three members of ATGI’s management team – chief executive Timothy Burfield, chief financial officer Charles Wallace and vice president of development Michael Freedman – previously worked with Thoma Cressey on American Medserve, a provider of institutional pharmacy services that grew through the acquisition of 25 companies.

Thoma Cressey’s principals first invested in American Medserve in 1994 from Golder Thoma Fund IV. The company then held its initial public offering in 1996, and the company ultimately was sold to Omnicare Inc. in 1997.

“Once the management team transitioned out, we began looking at other niches with them,” Mayer said. “Assistive technology struck us as a segment in an area that had not received as much attention.”

Separately, Thoma Cressey recently appointed Orlando Bravo and Christian Osborn to vice president from senior associates. The two are the first to hold the position with the firm, said Lee Mitchell, a Thoma Cressey principal. “This is just a way to acknowledge their proven abilities and greater experience,” Mitchell said. “Their responsibilities will remain essentially the same.”

Mitchell said the firm has no immediate plans to add more investment professionals to its current base of 13 employees.