Franklin, TN - Two leading private equity firms have made a significant growth investment in Passport Health Communications, Inc., a Franklin, Tenn.-based health care technology company. Passport offers health care providers and payers a comprehensive suite of solutions to manage the revenue cycle, enhancing the amount and timeliness of reimbursement and increasing administrative and financial productivity.
Following the recapitalization, Spectrum Equity and Great Hill Partners will own a majority interest in Passport. Primus Capital Funds, which led a recapitalization of the company in 2006, has rolled a majority of its existing stake and has contributed additional equity alongside Spectrum Equity and Great Hill. The senior management team, led by Chairman and CEO Jim Lackey, will continue to retain a significant equity position in the company.
"Passport is pleased to complete this recapitalization to help launch our next phase of growth," said Lackey. "We are fortunate to be able to work with this group of quality investors. Their collective experience and resources will allow us to carry out our long-term business plan by making continued investments in our products and services and by supporting acquisition opportunities."
Mark Taber, a Partner at Great Hill, commented, "Passport represents an exciting opportunity to capitalize on the favorable trends in the revenue cycle management sector. We are excited to partner with management and to provide the additional capital and resources to help Passport expand its product line and to support further strategic opportunities."
The transaction provided liquidity to long-term venture capital and angel investors, as well as provided access to additional capital for investment in new products and future acquisitions. Existing lenders Goldman Sachs Specialty Lending Group and Ares Capital Corporation also participated in the equity financing. The debt financing provided to Passport in May from Goldman, Ares and Wells Fargo Foothill remains in place.
"Passport is a highly profitable, rapidly growing provider of health care information technology services," said Jim Quagliaroli, Principal at Spectrum Equity. "Given our focus on information service businesses and specific investment experience in data communications and online services, Passport is a terrific fit for us."
In May Passport completed the acquisition of Nebo Systems, Inc., an Oakbrook Terrace, Ill.-based provider of claims management technology and insurance eligibility verification services. Nebo represented the company's fourth acquisition in the revenue cycle management sector.
As part of the recapitalization transaction, William Collatos and Jim Quagliaroli of Spectrum Equity and Matthew Vettel and Mark Taber of Great Hill will join Passport's board of directors. Phillip Molner of Primus and Lackey will remain directors of the company.
Brentwood Capital Advisors acted as Passport's exclusive financial advisor in the transaction. Latham & Watkins served as legal counsel for Spectrum Equity, Goodwin Procter served as legal counsel for Great Hill Partners, and Waller Lansden served as legal counsel for Passport.