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Longhorn Deal Spotlights Healthcare Trend

M&A abounds as more patients are recovering in a

Longhorn Health Solutions Inc., a provider of consumable medical supplies and equipment, already has a strong presence in Texas, but there's still a large portion of the market share remaining, says Satori Capital's co-founder Sunny Vanderbeck, the company's newest owner.

Longhorn brings disposable medical products-incontinence supplies, diabetes strips and specialty foods-to the homes of Medicaid, Medicare and privately insured patients. The company distributes the supplies in vans dispatched from its 10 warehouses (pictured) located across Texas: Austin, Houston, Beaumont, San Antonio, El Paso, Fort Worth, Corpus Christi, Harlingen, Lubbock and Waco. It recently launched a pharmacy division so that it can deliver medication as well.

"It's the future," says Brent Earles of investment bank Allegiance Capital Corp. who ran the sale process for Longhorn alongside fellow adviser Fred McCallister. More clients, they say, are banking on the notion that more patients are recovering in a "medical home" rather than a hospital.

"There's certainly an interest in this space, not just in Texas but across the country."

"We started the marketing effort in early- to mid-April," Earles adds, with about two-thirds of the interested bidders being outside of Texas. About 40 companies expressed serious interest, he says, with 60 percent being private equity firms.

In the end, Longhorn founder and chief executive Britt Peterson connected with Vanderbeck and "the classic PE deal appealed to him," McCallister says.

Terms of the deal, announced on Feb. 20, were not disclosed, but Satori generally makes investments that hover between $25 million and $75 million.

Under Satori's ownership, Longhorn will focus on organic growth in the near term, but add-on acquisitions will serve as a way for the company to eventually grow in other states, Vanderbeck explains.

"We haven't made any investments in healthcare," he adds. "What we saw here was a great services company in healthcare."

Prior to Satori, Vanderbeck co-founded and served as chief executive of Data Return, a provider of managed services and utility computing. Before that, he worked at Microsoft Corp. (Nasdaq: MSFT).


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