Illustration: Rebecca Zisser/Axios
GrowthCurve Capital's controlling investment in Revecore values the hospital revenue cycle management company in the low $500 million range, sources familiar with the deal terms tell Sarah.
Driving the news: GrowthCurve, launched less than a year ago by Sumit Rajpal, Goldman Sachs' former global co-head of merchant banking, clinched what represent's the private equity firm's debut health care deal (and third overall).
- The New York firm is acquiring Franklin, Tennessee-based Revecore, which delivers revenue integrity and complex claims solutions to around 1,200 hospitals
- Existing investor Riverside Partners remains a minority investor alongside management.
- TransUnion Healthcare's former CEO Dave Wojczynski has been appointed CEO.
Details: The parties have been in exclusivity since December, two sources say, and price talk in early on was around $600 million-plus.
- At $500 million-plus, that translates to an EBITDA multiple around the 16x to 17x zip-code, based upon EBITDA in the low $30 million range, sources say.
- If Riverside had elected to sell 100% of its investment it could have achieved a larger pricetag, but the firm ultimately chose a path that enabled it to retain a meaningful equity interest to continue to invest in future upside, one source notes.
- William Blair advised Revecore on the transaction.
State of play: The deal comes after industry giant R1 RCM made a transformative bet on New Mountain Capital's Cloudmed.
- The January an all-stock transaction valued Cloudmed at some $4.1 billion, and initially valued the combination at approximately $12.3 billion, sources told Axios then.
Flashback: Boston's Riverside invested in Revecore's predecessor company in 2016 via Fund V.
- Its initial platform investment was Bottom Line Systems, which it subsequently combined with Medical Reimbursements of America to create Revecore
Riverside and GrowthCurve declined to comment on valuation metrics, while the company did not respond to Axios' request for comment.