Riverside’s private equity

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Riverside Completes 39th Healthcare Investment December 10, 2009

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Pharmaceutical Cost-Containment Expert Joins RCAF Portfolio

Deal Type:
Platform Investment

Key Stats:
221st Acquisition Overall
39th Healthcare Acquisition
13th Riverside Acquisition of 2009

PharmMD Solutions, LLC (PharmMD)
Based in Brentwood, Tennessee

  • Provides medication therapy management (MTM) through software and services that identify and address medication overuse, underuse and misuse.
  • Principal clients include self-insured employers, and Medicare Part D plans looking to improve patient outcomes while reducing costs.
  • The company’s Doc System software enables users to review individuals’ medical, pharmacy and lab data. This data is analyzed using PharmMD’s SmartMTM™ Analytics, a proprietary rules engine that identifies drug therapy issues, suggest alternatives and provides clinical rationale for all recommendations.
  • PharmMD Chairman R. Clayton McWhorter founded the company in 2006 through his venture capital firm Clayton Associates.

Of Note:
The transaction is the fourth healthcare-related investment for Riverside in two months, following the platform acquisitions of Crioestaminal, FairPay and Precision Wire Components. Healthcare is one of several areas of specialization for Riverside, and PharmMD is the 17th healthcare-related platform company in the current Riverside portfolio.

Quotes:
Loren Schlachet, Riverside Managing Partner:
“PharmMD has a huge potential upside. Not only does it provide exceptional and proven value to its customers, but also stands to benefit from more stringent Medicare regulations in 2010, and could get a boost from the national healthcare reform currently being debated. Coupling that with a very talented management team and clear growth strategies, it’s easy to see why we’re so enthusiastic about the company.”

Samuel Bartholemew, Co-Founder and CEO:
“As we enter a time of significant growth, we are excited to have a partner with the wealth of experience and resources of Riverside. We look forward to expanding our client base and helping even more companies save money, while providing superior medication therapy management services for their employees.”

Riverside Team:
Working with Schlachet on the transaction were Brian Sauer, Vice President, Jeff Goodman, Operating Partner, and Brad Resnick, Analyst. Riverside Principal of Healthcare Origination Joseph Ibrahim sourced the deal.

Partners: Harpeth Capital advised PharmMD on this transaction.

The Riverside Company (www.riversidecompany.com or www.riversideeurope.com)
The Riverside Company is a global private equity firm focused on acquiring leading small and medium-sized enterprises (with EBITDA up to $30 million) and partnering with strong management teams to enhance the success of its companies through acquisitions and organic growth. Since its founding in 1988, the firm has invested in 221 transactions with a total enterprise value of $5.0 billion. The investment portfolio in North America, Europe and Asia includes 71 companies with annual sales totaling $3.3 billion, EBITDA of $506 million and more than 13,000 employees (June 2009). Riverside offers the resources to complete acquisitions smoothly - thanks to its more than $3.0 billion in assets under management, more than 180 professionals in 18 offices (Atlanta, Brussels, Budapest, Chicago, Cleveland, Dallas, Eindhoven, Hong Kong, Los Angeles, Madrid, Munich, New York, Prague, San Francisco, Seoul, Stockholm, Tokyo and Warsaw) and its longstanding relationships with partner lenders. According to Thomson Venture Economics, seven of Riverside’s nine mature funds rank in the top 25% of all funds (as at 31 December 2008). The firm’s investors include the world’s leading pension funds, endowments, funds of funds, insurance companies and banks.

PharmMD (www.pharmmd.com)
PharmMD is the nation’s leading medication therapy management (MTM) provider based in Brentwood, Tennessee. The company prevents medication related problems through the application of the best pharmacist and physician knowledge. PharmMD improves coordination and communication among physicians, pharmacists, payers and patients by analyzing pharmacy and medical claims information and impacting clinical decision making. Because PharmMD focuses exclusively on MTM, the company is able to analyze both aggregate and patient-specific data to identify trends and conflicts to positively impact patient health and contain costs.

Media Contact

Stephanie Fraser
Marketing Consultant
The Riverside Company
Cleveland: +1 216 344 1267
London: +44 20 3077 1923