GTCR, whose investment playbook centers around recruiting top-notch leaders to build companies, is teaming up yet again with two of the firm’s most successful partner executives as of recent history.
Continuing a busy several months for GTCR’s healthcare platform – which includes taking Maravai LifeSciences and Sotera Health public in November – the firm has launched its latest new platform, Epselon Global.
The new company has been formed in partnership with Michael Mulhern and Phil Macnabb – executives with whom GTCR has partnered five and four times, respectively, including on Sotera. Mulhern and Macnabb, executive chairman and CEO of Epselon, have worked together closely for over 20 years.
“You can count on one hand the number of execs we’ve partnered with four times, let alone five times,” GTCR managing director Sean Cunningham told PE Hub. “It’s hard finding really capable talented management teams, and when you find a great team, you love the opportunity to partner with them multiple times.”
Although Epselon is in the early stages of filling up its M&A pipeline, Cunningham said over time the firm will be looking to put “several hundred million dollars or more” behind this team.
Epselon, for its part, will focus on acquiring companies and assets to build a market-leading healthcare business.
While Epsilon has a pretty broad hunting ground, that will include scouring assets across the full supply chain that services the healthcare products industry, as well as those providing outsourcing services to healthcare providers and payors, Cunningham said.
“A number of their [Mulhern and Macnabb] business experiences have been around the plumbing of the healthcare industry – and we’re looking for those types of businesses,” Cunningham said.
Since 2002, Mulhern has been CEO of four GTCR companies – Sotera Health, Albany Molecular Research, Fairmount Food Group and American Sanitary, with previous experience at Baxter International and Alliant Foodservice.
Macnabb most recently served as president of Sotera Health’s largest division, Sterigenics, and was the former COO and CFO of Sotera. The executive also worked alongside Mulhern at executive posts at companies including Fairmount Food Group and American Sanitary.
GTCR, known for its “Leaders Strategy,” has a playbook built around recruiting exceptional leaders to build market-leading companies. When asked if this approach was comparable to the strategy taken by SPACs launching with big-wig names behind them, Cunningham acknowledged there are parallels.
“The competition for management talent is extremely stiff today and I think the SPACs are another alternative for talented management teams,” Cunningham noted. “But I do think for a lot of folks, it’s a fundamental question of whether you want to build out a company in a private or public context.” In a private context, for example, you don’t have quite the same level of quarterly scrutiny, he noted.
Many executives really like the “patient capital” lens through which GTCR invests, he continued: “We are not only patient but also have access to a lot of capital and debt,” Cunningham said. “We also think of ourselves as a value-added partner in helping source and build businesses … we’re working extremely hard with our executives to find opportunities.”
GTCR will invest in Epselon through its largest vehicle to date, GTCR Fund XIII, which has $7.5 billion of LP capital commitments.
GTCR, in partnership with industry veteran Gregory T Lucier, recently bought and combined two businesses through a $1 billion-plus transaction that creates a sizable new surgical technology player called Corza Medical, PE Hub wrote.
Formed through the simultaneous acquisition and merger of Surgical Specialties and TachoSil, Corza is now led by former NuVasive chief Lucier as executive chairman alongside Dan Croteau as CEO.
GTCR has also been quietly building out Cedar Gate Technologies, and the healthcare data and analytics business remains in growth mode despite the Chicago firm having launched the platform more than six years ago. On the heels of Cedar Gate’s December acquisition of Deerwalk – its second of the year – Cunningham told PE Hub that although the firm teamed up with former Medco chief David Snow several years ago, examining what a potential exit path looks like is not top of mind.