VSS Deals Avatar International

Avatar International has been sold via a secondary PE deal, changing hands between former owner Veronis Suhler Stevenson, the New York sponsor, and going to the Riverside Co., the Cleveland PE shop. The deal represents a larger than 4.0x ROI driven by a sole focus on organic growth. VSS was represented in its sale of Avatar International by financial advisors TripleTree, LLC.


Avatar Leads the Trend in Providing Patient-Centric Improvement Solutions for Healthcare Industry

NEW YORK, NY – September 7, 2011 – VSS Structured Capital I, an affiliate of Veronis Suhler Stevenson (VSS), a leading global private investment firm focused on the information, education, media, communications and business services industries, today announced that it has sold Avatar International, a premier provider of patient-centric, quality improvement solutions for the healthcare industry, to The Riverside Company. The sale represents a return in excess of 4.0x on the firm’s investment completed in June, 2008. Since then, Avatar International has seen double-digit revenue and impressive EBITDA growth in each of the past three years. Terms of the transaction were not disclosed.
Founded in 1981 and based in Orlando, FL, Avatar International provides customized, intelligent patient survey and reporting tools and training designed to improve the all-around patient experience. The Company — whose primary clients include health systems, large physician practices, group purchasing organizations and home health agencies — serves more than 400 hospital clients within more than 20 hospital systems, as well as 120 facilities representing 14,000 physicians, and 120 home health agencies. Avatar International is the industry’s only third-party, HIPAA-certified patient experience vendor, and provides clients with data that tracks a patient’s journey from admission to discharge.
Under VSS’s ownership, Avatar International has grown into a market leader, shifting and expanding its focus on providing comprehensive patient-centric solutions and positioning Avatar as the vendor with the most comprehensive approach to patient experience improvement in the U.S. market. Over the past three years, the Company has accumulated information on close to 25 million U.S. healthcare consumers and their interactions with healthcare providers, leading to improvements in the patient experience and bolstering healthcare provider accountability. Key development efforts since 2008 encompassed strengthening Avatar International’s management team, creating a research and quality department, and developing a structured sales team.
“Avatar International has undergone significant positive changes with the help of VSS’s valuable strategic guidance,” said CEO David Medvedeff, who will remain in that role. “By expanding our core capabilities from within, we are able to give clients more actionable data that can help them improve the patient experience, yielding better patient retention and federal reimbursement rates. We are well-positioned to maintain our momentum under The Riverside Company’s ownership.” Avatar’s management team will remain in place under new ownership.
“Working closely with Avatar International’s management team, the Company has made enormous strides, becoming an increasingly indispensible tool for healthcare providers who are eager to improve the patient experience,” said David Bainbridge, Partner, Veronis Suhler Stevenson. “Bolstered by favorable industry trends, we were able to transform the Company entirely through organic growth initiatives since acquiring it in 2008. We are confident that Avatar International will continue to flourish as healthcare providers, payers and consumers place an increasing value on patient satisfaction rates.”
Adds Hal Greenberg, Partner, VSS Structured Capital, “Our familiarity with the healthcare information sector has enabled us to provide an attractive return on our invested capital for our limited partners in this transaction. We are pleased with the results, which speak for the overall success of VSS’s Structured Capital franchise, and expect to continue to leverage our extensive industry and experience with existing and new investments.” Over the past 24 months, VSS Structured Capital II completed six investments, representing $133 million of invested capital, including the most recent acquisition of Strata Decision Technology, a pioneer in the development of innovative software tools for financial and business analytics in the U.S. healthcare industry.
This transaction also represents another successful exit for VSS. Just last month, in August, VSS completed the sale of financial data and software company Ipreo LLC to Kohlberg Kravis Roberts & Co., L.P. VSS has extensive experience in the healthcare information sector, including such platform investments as Strata Decision Technology, a U.S. provider of web-based financial analytics and performance management software tools for hospitals and healthcare systems; Executive Health Resources, a provider of expert medical management services to improve hospital compliance and achieve revenue integrity; and Solucient, a leading provider of comprehensive, intelligent market data to assist in the management of U.S. hospitals, managed care facilities, and pharmaceutical companies.
VSS was represented in its sale of Avatar International by financial advisors TripleTree, LLC.
About Veronis Suhler Stevenson
Veronis Suhler Stevenson (“VSS”), founded in 1981, is a leading private investment firm that makes private equity buyout and mezzanine investments in the information, education and media industries in North America and Europe. The VSS Structured Capital funds are dedicated to providing control and non-control capital to middle market companies in the VSS target industries to assist with strategic acquisitions, growth financings, recapitalizations, buyouts and other corporate and shareholder initiatives. VSS Structured Capital II commenced investing in 2009. To date, the six VSS equity and structured capital funds have invested in more than 68 platform companies, which have in turn completed over 305 add-on acquisitions resulting in a portfolio with realized and unrealized enterprise values in excess of $14 billion. The company’s website is www.vss.com.
About Avatar International
Avatar International (www.avatar-intl.com), a research and consulting company based in Orlando, FL, specializes in Evidence Based Intelligent Surveys™ and Innovative Strategies™ to transform information into significant quality and efficiency of care improvement for the healthcare industry. In addition to conducting surveys, Avatar also actively engages healthcare providers in process improvements, including training in service quality. Avatar serves healthcare organizations nationally, including small community hospitals, academic medical centers, large regional medical centers, integrated healthcare systems, long-term care and behavioral health organizations. Avatar International can be reached at 1-800-282-8274.
About TripleTree
TripleTree, LLC is an independent investment banking firm focused on mergers and acquisition, financial restructuring and principal investing services. For over a decade, the firm has worked with high-growth, innovative technology enabled businesses in healthcare and other industries. For more information, see www.triple-tree.com