Grotech Capital Group, a private equity investment firm, has invested $21.7 million in MedAssets, a group purchasing organization based in suburban Atlanta.
Harris Hyman IV, a Grotech general partner, will oversee the investment and has joined the MedAssets board of directors.
Grotech is just the newest investor in privately held MedAssets. Others include Greenhill Capital Partners, Parthenon Capital and Galen Partners, MedAssets indicated at an investor conference hosted by UBS in New York in February. Each of those investment firms has representatives on MedAssets' board of directors.
In response to an inquiry from Modern Healthcare, MedAssets officials acknowledged in a written statement that Grotech "has purchased a limited amount of MedAssets stock" from former owners of companies acquired by MedAssets, including Earl Norman, the founder and former owner of HSCA. In 2001, MedAssets purchased HSCA, which was based in Cape Girardeau, Mo., catapulting MedAssets from being a nonplayer in the GPO market to one of the top four national GPOs by purchasing volume. Norman continues to be "a significant owner" of MedAssets stock and a member of its board of directors, John Bardis, MedAssets' chairman, president and chief executive officer, said in a written statement.
Grotech officials said they have increased their focus on healthcare because they see opportunities for investment growth in the sector. MedAssets is the fifth healthcare company in Grotech's portfolio, and the firm intends to make as many as four more healthcare investments over the next two years. The firm's target investment size is $10 million to $40 million, according to the company's news release.
Through a subsidiary, MedAssets also provides revenue cycle services, including strategic pricing, pre-bill charge capturing, and chargemaster management tools. MedAssets says that on the GPO side, 22,000 providers purchase more than $7 billion in supplies each year though its contracts with more than 1,000 healthcare supply vendors.