K1 scoops up healthcare-communications company PerfectServe

  • Sell-side adviser: Piper Jaffray
  • Tennessee company raised ~$36 mln in funding
  • K1 invests in lower-middle-market software companies

K1 Investment Management quietly purchased healthcare-communications company PerfectServe this year, Buyouts has learned.

While the transaction has not been formally announced by the parties, it was noted in a financial release by venture-debt-finance company Hercules Capital.

Two people had previously said PerfectServe was working with Piper Jaffray to explore a sale. The process was preempted by K1, one of the people said.

PerfectServe is the Knoxville, Tennessee, provider of secure messaging technology that enables healthcare clinicians to communicate and share patient data more efficiently.

The company serves hospitals, health systems and physician practices.

K1, the El Segundo, California, private equity firm, focuses on high-growth enterprise-software companies with enterprise values of up to $200 million. The firm was targeting $1.5 billion for Fund IV, Buyouts has reported.

While other contenders for PerfectServe are unknown, sources had previously identified Vocera Communications as a logical suitor. The publicly traded clinical-communication company serves more than 1,400 hospitals and health systems worldwide.

PerfectServe prior to the transaction had raised a total of $35.9 million in funding over five rounds, its latest being a $21 million Series D round in September 2015, Crunchbase shows.

Previous investors include MemorialCare Innovation Fund, a strategic investment fund associated with MemorialCare Health System, CHV Capital, the strategic investment arm of Indiana University Health System, Piper Jaffray, River Cities Capital Funds and Ares Capital. The latter sold select venture loan assets to Hercules in November 2017 for about $125 million.

The company was founded in 2000 and is led by President and CEO Terry Edwards.

Representatives of K1 Capital, PerfectServe and Piper Jaffray did not return requests for comment.

Action Item: For more on K1 Investments, visit k1capital.com