Insights
- A private equity firm was evaluating a healthcare company in the worker’s compensation space to invest and add to its portfolio
- The company was a closely held, founder-owned business serving primarily as a PPO in the worker’s compensation industry, competing against very large institutions in the same space
- Discrepancies and operational issues were found relating to financial and systemic compliance issues that were hindering profitability and future growth
Action
- A Newport partner was retained to perform diligence and assessment of the company
- Private Equity changed their approach to their investment based on Newport’s recommendation adding a debt component with a more substantial equity earn out
- The existing management team was privately assessed by Newport and placed in positions which best utilized their skills
- Key leadership positions were repositioned and filled as appropriate along with a compliance function and discipline added to its senior leadership team
- Legal issues found with multimillion dollar exposures were resolved by the Newport partner to the favor the company for a modest amount and process changes were implemented
- A growth-oriented strategy was developed with new market verticals identified which highlighted key areas where resources were needed to leverage and grow the business
Results
- The company grew and developed showing significant EBITDA growth which enabled capital restructuring and private equity to successfully exit with a record multiple
- The Newport partner was retained by the CEO to serve on the Board to continue to reshape the organization and to work as a CEO advisor
- The Newport partner was also retained by Private Equity as a member of their board of advisors to advise the firm on strategic and legal matters, including future mergers and acquisitions
