Sheridan Capital Partners and Morgan Stanley Capital Partners have recapitalized SpendMend, a Grand Rapids, Michigan-based provider of tech-enabled solutions to optimize the cost cycle for the healthcare industry. No financial terms were disclosed. Evercore served as financial advisor to SpendMend while Harris Williams served as a financial advisor to MSCP.
CHICAGO, IL –March 2, 2022- Sheridan Capital Partners (“Sheridan”) is pleased to announce the majority recapitalization of SpendMend (“the Company”) in partnership with management and Morgan Stanley Capital Partners (“MSCP”), the middle-market focused private equity team at Morgan Stanley Investment Management. Sheridan originally invested in SpendMend in January 2018 and enjoyed four successful years working closely with the founders. Co-founder and CEO Dan Geelhoed and co-founder and President Rob Heminger will continue to lead the business, while Sheridan has retained a minority ownership stake and board seat.
Headquartered in Grand Rapids, MI, SpendMend is the leading provider of tech-enabled solutions to optimize the cost cycle for the healthcare industry. The Company serves more than a third of the top 100 health systems and is the market leader in profit recovery services utilizing its tech-enabled platform to generate cost savings for hospitals by identifying instances of payment errors and contract non-compliance within hospitals’ operating expenses.
Dan Geelhoed, CEO of SpendMend, said, “We could not be more pleased with the outcome of our partnership with Sheridan. Since the very beginning, the Sheridan team invested in our organization and our people to advance our mission of helping hospitals improve patient care through the delivery of our innovative cost-savings solutions.”
During Sheridan’s ownership, SpendMend grew into one of the largest platforms in the industry, both organically and through strategic M&A, including the completion of four accretive acquisitions. The Company acquired Contract Management Strategies, expanding SpendMend’s capabilities into medical device compliance spend while simultaneously growing the customer base for its core offering. The Company launched SpendMend Pharmacy in 2020 via its acquisition of Turnkey Pharmacy Solutions and Elevate340B and enhanced its core offering through other acquisitions.
Nick Rowland, Partner at Sheridan, said “It has been a pleasure to work with SpendMend to establish one of the nation’s premier providers of cost cycle management solutions. Their success is a true testament to the innovative technologies and the talented team they have built which are deeply valued by countless hospitals and health systems across the U.S.”
Sean Dempsey, Partner at Sheridan added “Dan, Rob and the rest of the SpendMend team built an incredible company whose proprietary technologies illuminate the cost cycle of its healthcare customers in transformative ways. There is significant value in their offerings and a perpetual need in the market for cost cycle management solutions. We are excited to continue supporting the team in this next chapter.”
Evercore served as exclusive financial advisor to SpendMend. Kirkland & Ellis LLP and Miller Johnson served as legal counsel to the Company. Harris Williams served as a financial advisor and DLA Piper LLP served as legal counsel to MSCP.
The transaction was led by Sean Dempsey, Jonathan Lewis, Nicholas Rowland, and Addison Jones at Sheridan Capital Partners. Terms of the transaction were not disclosed.
SpendMend helps leading healthcare organizations nationwide discover the full impact of financial leakage upon their organization. As the healthcare expert in audit recovery and spend visibility, SpendMend has perfected the process of holistically analyzing complex spend data to help an organization shed light upon ubiquitous financial leakage. SpendMend helps recover financial leakage and partners with clients to optimize cost cycle management and improve spend visibility. For more information, please visit the Company’s website www.spendmend.com.