Harris Williams & Co. Advises H.I.G. Capital on the Merger of PMSI with Progressive Medical

October 22, 2013

Harris Williams & Co., a preeminent middle market investment bank focused on the advisory needs of clients worldwide, announces the merger of PMSI, a provider of specialty managed care services and products to the workers’ compensation industry, with Progressive Medical. Harris Williams & Co. acted as the exclusive advisor to H.I.G. Capital (H.I.G.), the majority shareholder of PMSI, which realized its investment in PMSI as part of the transaction. The transaction closed on October 22, 2013 and was led by Turner Bredrup, Cheairs Porter, Geoff Smith, Whit Knier and Brian Lawson from Harris Williams & Co.’s Healthcare & Life Sciences (HCLS) Group, along with Marshall Croft from the firm’s Business Services Group.

The combined company, which will be led by Executive Chairman Eileen Auen from PMSI and Co-CEOs Emry Sisson and Tommy Young from Progressive Medical, will deliver comprehensive workers’ compensation pharmacy benefit management services including end-to-end pharmacy, ancillary and settlement solutions. Funds managed by Kelso & Company (Kelso) have agreed to acquire a significant ownership stake in the combined company. StoneRiver Group, the controlling shareholder of Progressive Medical, will continue to be a significant shareholder in the combined business.

“PMSI has established a reputation for providing customized, clinically-focused solutions to help its customers reduce healthcare costs,” said Cheairs Porter, a managing director in Harris Williams & Co.’s HCLS Group. “Its combination with Progressive Medical will provide enhanced cost containment capabilities and create a clear market leader in the workers’ compensation industry.”

“PMSI’s merger with Progressive Medical is evidence of the strong investor interest in the workers’ compensation sector, driven by investors’ desire to find scalable business models that have the potential to reduce overall medical costs,” said Turner Bredrup, a managing director in Harris Williams & Co.’s HCLS Group. “This transaction is a great outcome for all parties, and we look forward to the continued success of the combined business.”

Founded in 1976, PMSI is a leader in developing solutions to control the growth of medical costs in workers’ compensation. PMSI delivers proven solutions for cost containment across the claims lifecycle. PMSI’s solutions for pharmacy, critical care and settlement solutions deliver quantifiable results and improve the quality of care for injured workers.

Based in Miami, FL, H.I.G. is a leading global private equity investment firm with more than $13 billion of equity capital under management. With offices in Atlanta, Boston, Chicago, Dallas, New York and San Francisco, as well as international affiliate offices in London, Hamburg, Madrid, Paris and Rio de Janeiro, H.I.G. specializes in providing capital to small and medium-sized companies with attractive growth potential. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. Since its founding in 1993, H.I.G. has invested in and managed more than 200 companies worldwide. The firm’s current portfolio includes more than 80 companies with combined sales in excess of $30 billion.

Progressive Medical is a leading workers’ compensation pharmacy benefits and ancillary services provider. Through the delivery of PBM and ancillary services programs combined with unique third-party billing capabilities, evidence-based clinical programs, advanced clinical analytics, proactive government affairs and operational excellence, the company is accelerating change by providing more control as well as better financial and clinical outcomes for its clients.

Kelso is one of the oldest and most established firms specializing in private equity. Since 1980, Kelso has invested in more than 120 companies in a broad range of industry sectors with aggregate initial capitalization at closing of more than $45 billion. Kelso is currently investing its eighth investment partnership, Kelso Investment Associates VIII, L.P., with $5.1 billion of committed capital. The firm’s principals and employees are, collectively, the single largest investor in each of Kelso’s four most recent funds.

StoneRiver Group is a leading provider of outsourcing solutions to the insurance industry. The company owns Progressive Medical as well as several other companies operating in the insurance outsourcing industry. StoneRiver Group is owned by funds managed by Stone Point Capital and Fiserv, Inc.

The firm’s HCLS Group has experience across a broad range of sectors, including alternate site care; healthcare IT; managed care and cost containment services; medical devices, products and distribution; outsourced clinical and practice management services; and outsourced pharma services.  For more information on the HCLS Group and other recent transactions, visit the HCLS Group website.