Outcome Health, a healthcare advertising company that was accused of misleading clients, says it has sold a majority interest to private-equity firm Littlejohn.
Terms of the deal were not disclosed. Chicago-based Outcome previously raised nearly $500 million from investors, including Goldman Sachs, Pritzker Group Venture Capital and Google's venture capital arm.
Outcome said it plans to use the proceeds from its recapitalization to fund its long-term strategic plan.
The company provides health-related content TV screens and tablets in doctors' offices, and it sells advertising, primarily to pharmaceutical companies.
Outcome and its co-founders, Rishi Shah and Shradha Agarwal, had a lofty perch on the Chicago tech scene until they made news for the wrong reasons.
Advertisers questioned whether the company was misleading them about both the reach and results of campaigns. Their investors sued and the Justice Department announced an investigation. Shah and Agarwal, who were still majority owners, stepped down from day-to-day management and the board.
Matt McNally, an advertising-industry veteran, was hired as CEO and has been trying to rebuild the company.
Outcome's annual revenue dropped by more than half, below $100 million, people familiar with the company say. The company had raised little venture capital before the Goldman-led deal. But it borrowed more than $500 million to buy competitor AccentHealth in 2016.
"Outcome Health, on rebound from scandal, sells majority stake" originally appeared in Crain's Chicago Business.