Spectrum Announces Sale of Net Health

Spectrum Equity is pleased to announce the sale of Net Health. Spectrum originally acquired a control interest in Net Health in June 2012. Under Spectrum Equity's stewardship, Net Health significantly scaled operations and diversified its end-market reach over the past five years. Additionally, Spectrum recruited key board members with operational and healthcare IT expertise, providing valuable insights on new product initiatives and sales strategies. We would like to thank CEO Anthony Sanzo and the Net Health management team for their partnership, and we wish them well as they continue to execute upon their strategic vision.

The sale of Net Health is another exit in Spectrum Equity's longstanding healthcare IT portfolio. The firm’s investments in healthcare-related software, information services and Internet companies address the key constituents in healthcare from providers, payers, pharma, pharmacy as well as patients and consumers of healthcare services. Current healthcare IT investments include Definitive Healthcare, GoodRx and Verisys.

Below is the official press release for the transaction.

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The Carlyle Group and Level Equity, Together with Net Health Management, to Acquire Net Health, a Provider of Cloud-Based Healthcare IT Solutions to Healthcare Providers

Pittsburgh, PA — Net Health, a provider of cloud-based clinical documentation, practice management, and billing solutions for specialized outpatient healthcare providers, today announced it has entered into a definitive agreement to be acquired by The Carlyle Group (NASDAQ: CG), a global alternative asset manager, Net Health’s management team, and Level Equity, a software focused growth equity investor. The company’s industry-proven software solutions (Agility®, ReDoc®, and WoundExpert®) serve specialty healthcare providers and administrative professionals in five primary markets: employee health, occupational medicine, rehab therapy (PT, OT, SLP), urgent care, and wound care. The transaction is expected to close in Q4 2017 and terms of the transaction were not disclosed.

"We are absolutely thrilled to be partnering with The Carlyle Group,” said Anthony Sanzo, CEO of Net Health. “We are delighted by the confidence Carlyle has demonstrated in our products, services, vision, and leadership. Carlyle’s highly strategic, thoughtful, and collaborative approach will help the company capitalize on the vast opportunity ahead. In addition, we would like to thank Spectrum Equity for their stewardship of Net Health as the company experienced very strong growth and product innovation over the past five years, positioning the company for long-term success.”

Steve Bailey, Carlyle Managing Director, stated, “We’re excited to partner with Anthony Sanzo and the Net Health management team. Net Health has done an incredible job supporting specialized healthcare providers in high-growth clinical segments, including those that can’t be served effectively by generic HCIT (healthcare information technology) solutions. Net Health’s ability to streamline highly complex workflow is driving tremendous value for specialized healthcare providers and strong growth for the company.”

Mike Gozycki, Carlyle Managing Director, added, “Net Health’s best-in-class SaaS solutions increase revenue, reduce costs, and improve clinical outcomes for healthcare providers and their patients. With Carlyle and Level’s collective resources and capital, we are eager to support management’s plans to continue investing heavily in their best-of-breed software solutions, their highly scalable xfit® platform, customer support, and to generally support the company’s vision of making their customers successful.”

Jeff Haywood, Principal at Spectrum Equity, stated, “It has been a pleasure partnering with Anthony and the management team. Together, we scaled the company both organically as well as through acquisitions and created a fully integrated SaaS platform across all of the company’s end-markets. We wish the team well in the next phase of the company’s growth.”

Carlyle’s equity for the investment came will come from Carlyle U.S. Equity Opportunity Fund II, which is a Carlyle fund focused on middle market investments, and Net Health management. Carlyle has successfully coinvested with Level Equity previously and has a long history of successful investments in leading industry-specific application software solutions companies, including Compusearch, serving the government sector; FRS Global, serving the financial services sector; Gemcom, serving the mining sector; ION Investment Group, serving the financial services sector; MetroLogic, serving the aerospace and automotive sectors; OpenLink Financial, serving the commodity, energy, and financial services sector; Primatics, serving the financial services sector; Quorum, serving the energy sector; RMI, serving the rail sector; and SchoolNet, serving the education sector. Spectrum Equity, a leading growth equity firm and partner to Net Health for the past five years, will successfully exit its investment in Net Health.

Choate Hall & Stewart LLP provided legal advisory services and Aeris Partners LLC served as the exclusive investment banking advisor to Net Health and Spectrum Equity. Latham & Watkins provided legal advisory and Ernst & Young provided financial consulting to Carlyle and Level Equity.

About Net Health

Net Health is the leader in software solutions for specialized outpatient care. Known for being experts in The Art of the Right Fit®, our fully interoperable EHR solutions serve five medical specialty markets and offer clients an end-to-end solution that includes practice management tools, clinical workflow documentation, revenue cycle management, expert coaching, and analytics. Net Health serves healthcare professionals in 98% of the largest hospital chains as well as private practices around the country—driving workflow in more than 3,000 urgent care, wound care, physical therapy, speech and language therapy, occupational therapy, occupational medicine, employee health, and workplace medicine facilities each day. For more information visit nethealth.com.