Primus Capital has sponsored a recapitalization of PathGroup, a Brentwood, Tenn.-based provider of diagnostic laboratory services. The deal also included $19.5 million in mezzanine debt led by Maranon Capital and a senior credit facility.
Maranon Capital, L.P. announced today that it led a $19.5 million mezzanine debt investment to support the recapitalization of PathGroup and its subsidiaries in a transaction initiated by Primus Capital Funds. Maranon also provided $10 million of revolving credit and term debt as a participant in a senior credit facility.
“Maranon was an excellent financing partner,” said Phil Molner, a Managing Director at Primus. “They delivered a commitment for all the mezzanine required to complete the transaction and were flexible in their approach to working with the other senior lenders we selected.”
Greg Long, a Managing Director at Maranon Capital commented, “We are pleased to be working with Primus and the management team at PathGroup. This transaction illustrates the benefits of using one underwriting team for both the mezzanine and senior debt.”
Ian Larkin, a Managing Director and Co-Founder of Maranon Capital added, “Much has been written about the lackluster pace of investment activity, however, Maranon sourced over 600 opportunities in 2009 and closed four transactions since June. We believe there will be excellent opportunities in 2010 to partner with top-tier private equity firms like Primus.”
About Maranon Capital
Maranon Capital, L.P. provides senior financing, mezzanine debt and equity co-investments for private equity-backed and non-sponsored middle market transactions. Maranon has the flexibility to structure a one-stop financing solution or provide stand-alone senior or mezzanine debt. The firm does not take control equity positions, but will consider a minority equity role. Maranon is currently managing over $550 million of committed capital and has offices in Chicago, Illinois and Birmingham, Michigan. For more information about Maranon Capital please visit www.maranoncapital.com.
About Primus Capital Funds
Founded in 1983, Primus Capital Funds is a private equity firm that invests in high-growth companies within the healthcare, business services, and for-profit education industry sectors. Transaction types include management-led buyouts, control and non-control recapitalizations, and primary infusions of growth capital. More information about Primus can be found at www.primuscapital.com.
PathGroup and its subsidiaries provide a wide range of diagnostic laboratory services including anatomic, esoteric and clinical testing as well as administrative services. PathGroup’s clients include over 1,500 hospitals, multi-specialty clinics, surgery centers, physician offices and other clinical reference laboratories located throughout the Southeast and Midwest U.S. as well as California. For additional information please visit www.pathgroup.com.