Investment funds managed by Morgan Stanley Capital Partners, the middle-market focused private equity team at Morgan Stanley Investment Management, have acquired a controlling interest in SpendMend (the “Company”), from Sheridan Capital Partners. MSCP is partnering with the current management team led by CEO Dan Geelhoed and President Rob Heminger, who will continue to lead the business, as well as Sheridan Capital Partners, who will retain a minority stake in the Company.
“We are thrilled to announce our partnership with MSCP. Since our founding, our goal has been to help improve patient care with the value that we deliver through our innovative cost cycle solutions. Our partnership with MSCP will help us to drive even greater impact.”
Headquartered in Grand Rapids, MI, SpendMend is the leading provider of tech-enabled solutions to optimize the cost cycle for the healthcare industry. The Company serves more than a third of the top 100 health systems and is a market leader in profit recovery services utilizing its tech-enabled platform to generate cost savings for hospitals by identifying instances of payment errors and contract non-compliance within hospitals’ operating expenses. SpendMend has grown into one of the largest platforms in the industry through strong organic growth as well as strategic M&A, completing four acquisitions since 2017.
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Steve Rodgers, Managing Director and Head of Healthcare at MSCP, said: “We are delighted to partner with SpendMend and its best-in-class management team as they continue building a leader in cost cycle management and compliance management services to hospitals. SpendMend’s proven track record of robust organic growth and its customer-centric approach are a testament to what Dan, Rob, and the SpendMend team have built over the years. We look forward to working together to advance SpendMend’s market leadership in profit recovery and continue expanding the company through both organic growth and strategic add-on acquisitions.”
MSCP identified cost containment as a focus sub sector within healthcare 4 years ago, and as such, proactively pursued multiple opportunities in this category, including SpendMend. MSCP’s investment in SpendMend is consistent with the team’s focus on healthcare businesses that provide high-quality, outsourced services that address inefficiencies across the healthcare system. The management team and the broader employee base of SpendMend will retain a meaningful ownership position in the Company.
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Dan Geelhoed, CEO of SpendMend, said, “We are thrilled to announce our partnership with MSCP. Since our founding, our goal has been to help improve patient care with the value that we deliver through our innovative cost cycle solutions. Our partnership with MSCP will help us to drive even greater impact.”
Harris Williams served as a financial advisor and DLA Piper LLP served as legal counsel to MSCP. Evercore served as a financial advisor to SpendMend. Kirkland & Ellis LLP and Miller Johnson served as legal counsel to SpendMend.
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