News
Charterhouse Leads Recapitalization Of Logisticare New York, NY, May 28, 2004
Charterhouse Group, a New York-based private equity firm that has been actively investing in businesses and backing entrepreneurs since 1973, today announced that it has partnered with Summit Partners and AlpInvest Partners to complete a recapitalization of LogistiCare, Inc. in a transaction valued at $155 million. LogistiCare is the leading provider of outsourced transportation management services to the healthcare and human services industries.
The new investment is consistent with Charterhouse's strategy of partnering with experienced managers to source and add value, post-investment, to attractive, rapidly growing businesses. Charterhouse Principal Paul Verrochi, who was involved in identifying the LogistiCare opportunity, will now serve as Chairman of the Company. Mr. Verrochi was the Founder and former Chairman/CEO of American Medical Response, Inc., a provider of emergency medical transportation services; he came to know LogistiCare's CEO, John Shermyen, through their shared experiences in the medical transportation industry.
LogistiCare is the leader in the non-emergency medical transportation (NEMT) service sector with a market share of approximately 60%. LogistiCare provides services to governmental agencies and other human services organizations that are typically under cost pressure due to increasing costs of healthcare and declining budgets. State Medicaid programs are required by federal regulation to provide recipients with access to and from medical encounters. However, states are often ill-equipped to efficiently and economically provide for this mission-critical transportation benefit internally. State agencies therefore contract with LogistiCare to organize and to manage a credentialed network of local third-party providers to deliver the transportation on an outsourced basis. LogistiCare generally does not own any vehicles, but rather it manages a network of assets as a third-party logistics provider.
Jay Gates, Charterhouse Partner, said, "We are very excited to be partnering with John Shermyen and his team to continue LogistiCare's impressive growth. The Company has a very attractive business model that offers significant benefits to its customers. The attractive financial attributes include a recurring revenue base and strong free cash flow. As the market leader, we expect LogistiCare to grow significantly over the next several years as more states and other human services organizations recognize the benefits of outsourcing transportation management. We are also looking forward to working with Summit Partners and AlpInvest Partners, one of our key limited partners, as equity investors in the Company. Both institutions have strong experience in the business services sector."
Mr. Verrochi said, "I have known John Shermyen for years and have tremendous respect for his team. I am pleased to now have the opportunity to work with him and continue building this great company."
John Shermyen, CEO of LogistiCare, stated, "We are very pleased to be partnering with Charterhouse as our lead equity investor. The firm's long track record of helping middle-market companies grow with the strategic and collaborative support of management teams, combined with their deep understanding of logistics and outsourcing, positioned Charterhouse as our preferred value-added investor."
According to John Carroll, a Principal with Summit Partners, "LogistiCare's John Shermyen and his strong management team have built a company that has become a clear market leader for transportation programs to government and commercial clients. We look forward to working with management and helping to further expand the services and sectors the Company currently supports."
About Charterhouse Group
Charterhouse Group, Inc. is a private equity firm with over three decades of experience in building leading middle-market companies. Established in 1973, Charterhouse currently manages in excess of $1.4 billion in equity through several limited partnerships. Since its inception, Charterhouse has completed investments in over 80 platform companies with a focus in the business services, healthcare services and consumer sectors. For more information, please visit www.charterhousegroup.com.
About LogistiCare
Headquartered in Atlanta, Ga., LogistiCare, Inc., is the nation's leading provider of specialized transportation network management. The company's government clients include state Medicaid agencies, school boards and transit authorities. Healthcare sector clients include hospital systems, self-insurers and several of the nation's largest managed care organizations. With its market innovation, proprietary software, and proven record of creating budget stability and program integrity, LogistiCare is well known as the thought leader in improving non-emergency transportation programs. On an annual basis, the company manages a national network of more than 700 transportation companies that deliver the actual trip service to customers. In 2002, LogistiCare was recognized as one of the nation's fastest-growing enterprises. For more information, please visit www.logisticare.com.
About Summit Partners
Summit Partners is a leading private equity and venture capital firm. The firm has a capital base of more than $5.5 billion, with offices in Boston, Palo Alto, and London. Formed in 1984, Summit Partners has provided growth equity, recapitalization, and leveraged buyout financing to more than 250 companies, which have completed more than 100 public offerings and 80 strategic mergers or sales. Summit Partners seeks outstanding management teams that have self-financed their companies to profitability and market leadership in a broad range of emerging growth industries, including technology, healthcare, business and financial services, and industrial and consumer products. For more information, please visit www.summitpartners.com.
About AlpInvest Partners
AlpInvest Partners is one of the largest private equity investors in the world, with more than EUR 20 billion of assets under management invested in private equity funds, direct investments and co-investments. The funds are managed by approximately 60 investment professionals from offices in Amsterdam, Antwerp, Frankfurt and New York. For more information, please visit www.alpinvest.com.
Contacts:
Charterhouse Group:
David G. Hoffman, Partner, 212-584-3234
Jay Gates, Partner, 212-584-3223
LogistiCare:
John Shermyen, Chief Executive Officer, 770-907-7596
Summit Partners:
Joan D. Miller, Vice President, 617-824-1047
AlpInvest Partners:
Iain Leigh, Managing Partner, 212-332-6260
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