Polaris Venture Partners has made a significant equity investment” in National Electronic Attachment Inc., a provider of secure electronic data transmission, presentation and storage services for dental claims attachments. The deal also includes NEA sister company Medical Electronic Attachment Inc., which focuses on the medical claims market. Brokwood Associates advised NEA and MEA on the deal, which closed in late December.
National Electronic Attachment, Inc. and its sister company, Medical Electronic Attachment, Inc., announced today that they have received a significant equity investment from Polaris Venture Partners, a $3 billion Boston–based venture capital and private equity firm. As part of the transaction, Bryce Youngren and Ryan Woodley from Polaris will join the board of NEA. Mr. Thomas W. Hughes, the founder, will continue as the Company’s CEO and President.
Brookwood Associates served as the exclusive financial advisor to NEA and MEA for the transaction. NEA was founded in 1997 and pioneered the secure electronic data transmission, presentation and storage services for dental claims attachments. NEA grew rapidly in the ensuing years and is the number one processor of dental claims attachments in the country, transmitting over 4 million electronic attachments a year. MEA was founded in 2007 to pursue the significantly larger medical claims attachments market. Current customers include UnitedHealth, Humana, Blue Cross, Delta Dental, Cigna and 330 other health and dental insurance payors, as well as approximately 18,000 dental and physician offices. The majority of medical and dental insurance claims are submitted electronically today, but most supporting attachments are still submitted by mail or fax. NEA and MEA’s services enable claims attachments (i.e., x–rays, test reports, physician notes, etc.) to be submitted through similar electronic means. The solutions offered by NEA and MEA are critical components supporting the accelerating trends in the healthcare industry tomove toward paperless systems, thereby reducing processing costs, improving revenue cycle management and improving patient data security.
Commenting on the transaction, Mr. Hughes said “We are a success story out of the dot‐com era, and have built the people and processes to dominate the dental claims attachments market. However, given the magnitude of the medical market opportunity, we wanted to add a partner with the experience and resources to help us maximize this next critical phase of our growth. Brookwood understood revenue cycle management and contacted numerous financial and strategic partners who saw the potential i our business. Polaris brought the best combination of experience, capital and personal chemistry to the table, and I am thrilled to partner with such a well–regarded institution.”
Adds Polaris Partner Bryce Youngren, “It is extremely rare to find companies similar to NEA, which combine a dominant and sustainable market position, an acknowledged reputation for customer service, a profitable business model and a huge addressable, untapped market. Based upon our pre‐existing knowledge of this space, we were immediately intrigued. When we met the management team, we were sold. We are excited to begin our partnership with Tom and his team and look forward to assisting the Company however we can to maxmize this next phase of their growth.”
David Felts, a Managing Director with Brookwood Associates in Atlanta, observes: “Our project with NEA and MEA is another example of assisting market–leading family–controlled businesses to achieve growth–oriented, “win–win” outcomes. By approaching a broad universe of industry knowledgeable investors, we were thrilled to identify a partner meeting all of the management team’s criteria. Even in the current difficult capital market environment, this deal affirms that solid companies with strong management teams and growth potential can still find great investment partnrs at attractive valuations.”
About Thomas W. Hughes:
Mr. Hughes is a serial entrepreneur. Prior to founding NEA, he was the founder and President of Electronic Claims & Funding (ECF), which was then the largest dental electronic claims clearinghouse in the country. Mr. Hughes sold ECF to MedE–America, Inc. in 1995 and currently, this company is known as Emdeon’s Dental Division. He also owned Premier Systems Corporation, one of the largest dental practice management software companies in the industry. Mr. Hughes serves on the Board of Kennesaw State University’s Coles College of Business and also is a Board Member of the AllianceFor Children Everywhere, which builds schools and crisis nurseries in Zambia. In 2007 Mr. Hughes was awarded the Benjamin D. Ward award for Excellence in Dental EDI by the National Dental EDI Council.
About Polaris Venture Partners:
Polaris is a national venture capital firm with over $3 billion under management. Polaris invests in seed, early stage and growth equity businesses in the technology, life science, digital media, and consumer sectors. Polaris is one of the leading investors in the healthcare technology sector.
Other existing portfolio companies in metro Atlanta include: Alimera Sciences and Cardlytics; and other healthcare technology portfolio companies include: CodeRyte, Sentillion, and Advion BioSciences. (www.polarisventures.com)
About Brookwood Associates:
Brookwood was founded in 1989 and has grown to become one of the largest independently owned middle–market investment banking firms in the nation. Brookwood has 22 professionals, including seven Managing Directors, with offices in Atlanta and Charlotte. The firm offers merger, acquisition, corporate financing, restructuring, fairness opinion and other related advisory services. (www.brookwoodassociates.com)