Private equity firm Spectrum Equity has put an undisclosed amount into Net Health Systems, a provider of clinical information systems for the field of wound care. Terms were not released.Net Health Systems is based in Pittsburgh.
Net Health Systems, the leading provider of clinical information systems for the rapidly growing field of wound care, announced today it has received a significant investment from Spectrum Equity, a leading private equity firm focused on the information economy.
In connection with the transaction, the leadership team of Chief Executive Officer Anthony Sanzo, President Patrick Colletti and Chief Technology Officer Christopher Hayes will continue in their executive roles and have co-invested alongside Spectrum Equity. Net Health will remain headquartered in Pittsburgh. With Spectrum Equity’s backing, Net Health will aim to build on its market leadership in wound care technology and extend and diversify its electronic health record (“EHR”) product offerings into adjacent segments.
Net Health CEO Anthony Sanzo commented, “Net Health is committed to delivering the best possible technology solutions for our clients. Net Health is well positioned to benefit from the growth in the number of hospitals which are building outpatient wound care facilities and the rapid adoption of technology and EHRs within wound care facilities. In addition to our excitement around the compelling growth opportunities in the wound care market, we believe we can leverage our products to address other closely adjacent settings where technology and EHR adoption are increasing. We look forward to working with Spectrum Equity to continue Net Health’s impressive growth trajectory.”
Patrick Colletti, President of Net Health said, “Wound care is a large and growing market in healthcare. As the population ages and as obesity and diabetes continue to affect a large portion of Americans, chronic wounds are becoming more prevalent. Net Health’s technology improves patient care and outcomes while minimizing costs associated with the treatment of chronic wounds. WoundExpert is the dominant product used by hospital-based outpatient wound care clinics, and we are seeing increased adoption of our products within other wound care treatment settings throughout the care continuum.”
Jim Quagliaroli, Managing Director of Spectrum Equity, commented, “We are very pleased to partner with Anthony, Patrick and Chris. We believe that market demand for the company’s web-based EHR platform will continue to grow as more physicians, clinicians and healthcare professionals across the wound care continuum seek to improve patient care and facility performance. As the market leader with a long track record of profitable growth, Net Health is a great fit for Spectrum Equity and our portfolio of healthcare IT businesses.”
As part of the transaction, Quagliaroli has become chairman of Net Health’s board of directors. Jeff Haywood of Spectrum Equity has also joined the board, as have industry veterans Pat Cline and Ruben J. King-Shaw, Jr. Cline served as President of Quality Systems, Inc. (NASDAQ: QSII) from November 2009 to December 2011 and previously served as President of its NextGen Healthcare subsidiary, a leading EHR player he co-founded in 1994. Cline started his healthcare IT career in 1981 and has more than three decades of senior-level management experience. King-Shaw is Lead Director of athenahealth (NASADQ: ATHN) and Managing Partner of Mansa Capital LLC, a healthcare private equity investment and advisory firm he co-founded in 2005. Earlier in his career, King-Shaw served as Deputy Administrator and Chief Operating Officer of the Centers for Medicare & Medicaid Services and as Senior Advisor to the Secretary of the Treasury.
Financial terms of the transaction were not disclosed. Spectrum Equity was advised by Choate Hall & Stewart LLP. Net Health and selling shareholders were advised by Metz Lewis Brodman Must O’Keefe LLC and K&L Gates LLP.
About Net Health Systems
Net Health’s WoundExpert platform is a certified Electronic Health Record (“EHR”) system utilized by over 20,000 physicians across over 1,000 facilities throughout the United States. Outpatient wound clinics, long-term care and home health facilities, traveling physicians and other healthcare providers use Net Heath’s fully integrated SaaS platform to record clinical procedures and document financial results in order to improve patient care and outcomes, as well as to comply with regulatory requirements. WoundExpert specifically allows providers to assess wounds and document care planning; schedule, receive and track insurance authorization; record and track coding and billing; benchmark facility performance, and provide telemedicine services. In addition, Net Health’s database of over 6 million patient encounters represents the largest independent source of chronic wound benchmarking data in the industry.
About Spectrum Equity
Spectrum Equity is a private equity firm focused on investing in growth companies leading the information economy. Spectrum Equity’s current and historical healthcare investments of note include HealthMEDX, a provider of long-term and post-acute care technology; Passport Health Communications, a provider of patient access solutions for hospitals and physicians; and QTC Management, the nation’s largest provider of outsourced disability evaluations (acquired by Lockheed Martin). Spectrum Equity has been an active investor in software and information service providers including iPay Technologies (acquired by Jack Henry & Associates, NASDAQ: JKHY), RiskMetrics Group (NYSE: RMG, acquired by MSCI, NYSE: MSCI), Seisint (acquired by LexisNexis/Reed Elsevier, NYSE: RUK), and World-Check (acquired by Thomson Reuters, NYSE: TRI), as well as digital media franchises including Ancestry.com (NASDAQ: ACOM), Demand Media (NYSE: DMD), NetQuote (acquired by Bankrate, NYSE: RATE), Seamless, and SurveyMonkey. Founded in 1994 with offices in Boston and Menlo Park, Spectrum Equity has raised $4.7 billion in capital across six funds.