Houlihan Lokey Advises Varsity Healthcare Partners

Houlihan Lokey is pleased to announce that Varsity Healthcare Partners (VHP) has completed the acquisition of abeo Management Corp. (abeo), a portfolio company of Parthenon Capital (Parthenon), and has merged abeo with DuvaSawko, an existing portfolio company of VHP. The transaction closed on November 24, 2020.

VHP is a lower-middle-market private equity investment firm focused on partnering with founders, entrepreneurs, and management teams to build leading healthcare services companies. It has been successful in developing and executing a tailored value-creation plan, in partnership with the leaders of each company that typically emphasize an appropriate investment in infrastructure followed by an aggressive organic and acquisition growth strategy. VHP draws upon its extensive healthcare industry experience and relationships, as well as its hands-on partnership approach, to effectively drive growth and maximize value.

Based in Dallas, abeo provides comprehensive revenue cycle services and practice management solutions for more than 350 hospital-based and independent anesthesia practices. The company marries end-to-end RCM capabilities and proprietary technology solutions with extensive practice management capabilities to optimize collections/workflow, compliance, and practice efficiencies for clients across 42 states nationwide. abeo’s anesthesia RCM platform and service infrastructure support client billing and collections processing associated with more than 3 million anesthesia cases annually, while its advisory services and technology products assist its clients with driving enterprise wide efficiencies.

Parthenon is a leading growth-oriented private equity firm with offices in Boston, San Francisco, and Austin. It utilizes niche industry expertise and a deep execution team to invest in growth companies in service and technology industries. Parthenon seeks to be an active and aligned partner to management, either through recapitalization transactions or by backing new executives. It has particular expertise in financial and insurance services, healthcare, and technology services, but seeks any service, technology, or delivery business with a strong value proposition and proprietary know-how.

Headquartered in Ormond Beach, Florida, DuvaSawko is a leading provider of revenue cycle management services for independent and hospital-employed emergency physician groups. It processes more than 4 million annual emergency room visits across 120 medical facilities in 19 states leveraging its highly automated proprietary billing platform and extensive customer service infrastructure. Founded in 1998 by Dr. Charles Duva and Dr. William Sawko and supported by a workforce of approximately 360 employees, DuvaSawko’s RCM solutions optimize collections per patient visit while reducing errors, increasing productivity, and driving efficiencies end to end across all billing and collections functions for emergency medicine customers.

Houlihan Lokey served as the exclusive buyside financial advisor to VHP, assisting in identifying, evaluating, and negotiating the acquisition. This transaction creates a leading multivertical provider of revenue cycle and practice management services to emergency medicine and anesthesia physician groups. This deal also represents Houlihan Lokey’s continued leadership and momentum in the healthcare technology and tech-enabled services sector, having advised on 38 transactions since 2015. Houlihan Lokey’s Healthcare Group is among the largest dedicated healthcare investment banking groups in the country. In 2019, the group closed 27 transactions and was ranked the No. 1 advisor for all U.S. healthcare M&A transactions by Refinitiv (formerly Thomson Reuters). Houlihan Lokey’s Healthcare Group has closed more than 300 M&A healthcare transactions since inception.