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Spectrum’s Net Health nears sale to Carlyle

  • Anticipated deal follows Aeris Partners-run sales process
  • Spectrum invested in Net Health in June 2012
  • Carlyle fund struck deal for Newport Academy in August

Spectrum Equity’s auction for Net Health, the software provider for specialized outpatient care it backed more than five years ago, is nearing conclusion.

Carlyle Group, through its U.S. Equity Opportunity Fund, is close to acquiring the Pittsburgh company, a Hart-Scott-Rodino early-termination notice shows.

The FTC filing follows an Aeris Partners-run sales process for the company, according to two sources.

The sources previously told Buyouts the company posts EBITDA of about $16 million on revenue of close to $60 million.

For Carlyle’s U.S. Opportunity fund, the expected acquisition would follow its purchase of teen-treatment provider Newport Academy. Buyouts reported in August the fund was poised to buy Newport following a Moelis-conducted sales process.

Led by CEO and Chairman Anthony Sanzo, Net Health offers clinical-information software that serves specialty areas including urgent care, wound care, employee health, occupational medicine and physical therapy.

The company’s electronic-health-record services include practice-management tools, clinical workflow documentation, revenue-cycle management, analytics and professional services.

Specialty EHR is an attractive space, but the company’s addressable market size and opportunity for organic growth is seemingly limited, sources said. It’s a challenging place for smaller companies to play when industry giants the likes of Cerner Corp offer their own EHR services.

Spectrum, with offices in Boston and San Francisco, made a growth-equity investment in Net Health in June 2012.

Spectrum Co-Founder and Managing Director Bill Collatos and Principal Jeff Hayword hold directorships at Net Health.

Action Item: Get in touch with Spectrum’s Collatos or Hayword at +1 617-464-4600.

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