Gryphon Investors said July 6 that it is buying Ob Hospitalist Group from Ares Management LP. Financial terms weren’t announced. Ares, along with OBHG founders Dr. Chris Swain and David Swain, will retain a minority stake. OBHG, of Maudlin, South Carolina, is an OB/GYN hospitalist provider in the U.S with a national network of over 550 OB hospitalists serving more than 120 partner hospitals across 28 states. Moelis & Company LLC and Jefferies LLC provided financial advice to Ob Hospitalist Group. Kirkland & Ellis LLP acted as legal counsel to Gryphon, while Proskauer Rose LLP advised OBHG and Ares.
SAN FRANCISCO & NEW YORK–(BUSINESS WIRE)–Gryphon Investors (“Gryphon”), a San Francisco-based private equity firm, and Ares Management, L.P. (“Ares”) (NYSE:ARES) today announced that Gryphon will acquire Ob Hospitalist Group (“OBHG” or “the Company”) from a fund affiliated with Ares. OBHG is the nation’s leading provider of obstetric hospitalist services.
Ares’ fund, along with OBHG founders Dr. Chris Swain and David Swain, will retain a minority ownership position in the Company. Terms of the transaction, which is expected to close in late July, were not disclosed.
Founded in 2006 and based in Mauldin, SC, OBHG is the largest OB/GYN hospitalist provider in the U.S., with a national network of over 550 OB hospitalists serving in more than 120 partner hospitals across 28 states. Through its obstetric hospitalist programs, most commonly providing onsite coverage 24 hours a day, 365 days a year by board certified physicians and featuring an obstetric emergency department (OBED), the company improves the standard of care at partner hospitals for expectant mothers by ensuring consistent and unconditional access to medical care. In addition, as the nation’s largest provider, OBHG is uniquely capable of partnering both with hospitals and the provider community to improve clinical quality, reduce medical risk and increase the efficiency of the care delivery model.
Ob Hospitalist Group CEO Leonard Castiglione stated, “Our partnership with Ares allowed us to focus on patient outcomes, clinical quality, and operational excellence, which enabled OBHG to expand our customer base and deliver unsurpassed value to our existing customers. We are excited about our new relationship with the Gryphon team and will benefit from their significant resources and expertise to support our clinical mission and growth strategy and further differentiate our value with existing customers.”
Nick Orum, Gryphon’s President and Head of the firm’s Healthcare Group, said, “Gryphon’s investment is the result of a proactive effort over many months to identify market leading companies in hospital-based medicine services. With the support of experienced executive advisors Kevin Blank and Dr. Adam Singer, we quickly recognized the value that OB hospitalist programs provide through more timely, coordinated and safer patient care, as well as an improved quality of life for physicians. OBHG is a best-in-class company within this growing field.”
Mr. Blank, a member of Gryphon’s Operations Resources Group, will join the board of directors of OBHG’s parent company as Executive Chairman. He has more than 30 years of healthcare operations experience, including in the women’s health area. Dr. Singer, the founder and former CEO of IPC Healthcare, also advised Gryphon and will join the board.
Bennett Rosenthal, Co-Founder and Partner of Ares and Co-Head of the Ares Private Equity Group, said, “We are grateful for the opportunity we had as the financial sponsor of OBHG to partner with the Company’s outstanding management team, visionary founders David and Chris Swain, and Ascension Ventures. We are excited to partner with Gryphon and to continue assisting with the Company’s growth as it pursues its mission of improving women’s health outcomes and saving lives.”
Moelis & Company LLC and Jefferies LLC acted as financial advisors to the Company. Kirkland & Ellis LLP provided legal counsel to Gryphon, while Proskauer Rose LLP advised OBHG and Ares.
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About Ob Hospitalist Group
Ob Hospitalist Group (OBHG) is the Nation’s leading provider of OB/GYN Hospitalist Services. The company was founded in 2006 with a vision to elevate the standard of women’s healthcare by ensuring every expectant mother presenting to the hospital receives consistent and unconditional medical care by an experienced physician. OBHG leads the nation in developing and managing customized, financially viable OB/GYN hospitalist programs featuring an Obstetric Emergency Department (OBED) staffed with Board Certified physicians 24 hours a day, 365 days a year. Over the last decade the company’s national network has grown to over 550 dedicated OB hospitalists serving in more than 120 partner hospitals across 28 states. For more information, visit www.obhg.com.
About Gryphon Investors
Based in San Francisco, Gryphon Investors (www.gryphoninvestors.com) is a leading private equity firm focused on profitably growing and competitively enhancing middle-market companies in partnership with experienced management. For five consecutive years, Gryphon has been ranked in Preqin’s prestigious quarterly PE report as one of North America’s top-decile firms based on consistency of strong investment returns. Managing over $2.5bn of equity investments and capital since 1997, the firm has an extensive track record of leading equity investments of $50 million to $200 million per portfolio company with sales ranging from approximately $100 million to $500 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, specialized professional resources, and operational expertise.
About Ares Management
Ares Management, L.P. is a publicly traded, leading global alternative asset manager with approximately $100 billion of assets under management as of March 31, 2017, and more than 15 offices in the United States, Europe and Asia. Since its inception in 1997, Ares Management has adhered to a disciplined investment philosophy that focuses on delivering strong risk-adjusted investment returns throughout market cycles. Ares Management believes each of its three distinct but complementary investment groups in Credit, Private Equity and Real Estate is a market leader based on assets under management and investment performance. Ares Management was built upon the fundamental principle that each group benefits from being part of the greater whole. For more information, visit www.aresmgmt.com.