Harvest Partners Picks Up Acquisitive Dermatologist Platform from Audax

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Private equity firm Harvest Partners has acquired a stake in Advanced Dermatology & Cosmetic Surgery, a dermatology practice with more than 140 offices, from Audax Private Equity. Terms of the deal were not disclosed. With the transaction, both Audax and the Advanced Dermatology’s management team retain minority ownership stakes in the company.

According to Harvest Partners, Advanced Dermatology, based in Maitland, Florida, is the largest dermatology practice in the country. The company, which was founded in 1989, also has a billing and coding services business for third-party dermatology practices under the Ameriderm trade name. Advanced Dermatology’s CEO, Dr. Matt Leavitt, and its president and chief operating officer, David Morell, are continuing in their roles following the deal.

Harvest Partners sees Advanced Dermatology as the leader among the few companies in the dermatology space that can be scaled up, says Paige Daly, managing director at Harvest Partners. Harvest will partner with Advanced Dermatology to continue the company’s consolidation strategy in the dermatology practices market.  Keith Palumbo, managing director at Audax, says his firm is excited to partner with Harvest because of its “great insight and expertise in multi-site businesses.”

New York-based Harvest Partners focuses on management buyouts and recapitalizations of middle-market companies in North America, including services companies in the healthcare, business, consumer, industrial and energy sectors, and manufacturing and distribution companies.

Audax Private Equity is part of Boston-based Audax Group, an alternative asset management firm focused on middle-market companies with more than $10 billion under management. Audax acquired Advanced Dermatology 2011 and has since completed 40 acquisitions and added five new clinics, expanding the company to cover 13 states with 146 offices, up from two states and 53 locations, including the addition of Dermatology of Northern Colorado. The latter was Audax’s 500th transaction.

Audax Private Equity won Mergers & Acquisitions’ 2015 M&A Mid-Market Award for Private Equity Firm of the Year, receiving the recognition for raising its fifth fund and closing on more than 100 investments despite an overall slowdown in middle-market deal activity.

Jefferies LLC was the financial adviser on the deal for Advanced Dermatology and Audax. Ropes & Gray LLP was the legal adviser for Advanced Dermatology and Audax for the transaction, while White & Case was Harvest’s legal adviser. Golub Capital and Crescent Capital Group financed the deal.

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