Edgewater Growth Capital Partners, II L.P. (“Edgewater”) is pleased to announce the sale of its portfolio company ETX Holdings, Inc. (“ETX” or the “Company”). ETX is a manufacturer and distributor of remanufactured auto parts with operations in Michigan, Texas and Tennessee. The sale of the Company was completed in February 2014 to a large industry participant backed by a private equity sponsor.
ETX was acquired in December 2006 as a platform from which to acquire additional automotive parts manufactures. Given the contrarian nature of the investment, Edgewater expected to complete add-on acquisitions at very favorable purchase multiples. During the investment period, management completed five acquisitions, primarily of small distribution businesses which were completed for prices close to the value of the assets acquired. On average, the purchase price multiple for these acquisitions was 3.2 times pro forma EBITDA.
ETX has been led by a very good management team who successfully guided the Company through the severe recession of 2008-2009 during which General Motors, Daimler Chrysler and many auto part suppliers were driven into bankruptcy. During this period, the Company maintained a low level of third party debt and aggressively managed cash flow. Despite the recession, our expectation that the domestic auto industry would eventually return to financial health came to fruition. ETX was sold at an effective valuation multiple that was over twice what Edgewater paid for the company.
Edgewater Announces the Sale of Portfolio Company ETX (103 KB)
Edgewater Growth Capital Partners III, L.P. (the “Fund”) is pleased to announce the recent acquisition of MedFin Billing Services, Inc. and its affiliated companies (collectively “MedFin” or the “Company”). MedFin provides billing, practice management and outsourcing services for physician groups and ambulatory surgery centers. The Company is based in Sarasota, Florida with a wholly owned service center in Kolkata, India. MedFin will operate within the Fund’s platform company Bolder Healthcare Solutions which provides revenue cycle management services to hospitals and physicians.
MedFin enables its clients to navigate the increasingly regulated processes required to receive full and timely payment for medical services. These payment processes include highly technical coding, billing, negotiations with payors and payment appeals to ultimately maximize the cash flow received by the physician. MedFin’s 400 employees service a rapidly growing number of clients located principally in the Southeast and Mid Atlantic states. The Kolkata, India service center manages the extensive administrative requirements of the U.S. medical payment system at a low cost which makes MedFin a very cost effective solution for its clients. MedFin’s India service center will be expanded and utilized by other Bolder Healthcare Solutions companies.
Bolder Healthcare Solutions is continuing to actively pursue acquisitions across a broad range of revenue cycle management service providers.
Edgewater Acquires Revenue Cycle Management Business (221 KB)