At their root, the bulk of deals are about relationships, and Cressey & Co.’s latest investment in home health software maker Homecare Homebase is no exception.
The firm partnered with SV Life Sciences to recapitalize Homecare Homebase, a business co-founded and now headed by April Anthony, CEO of another Cressey investment, Encompass Home Health.
“We’re huge fans of April,” said Peter Ehrich, a partner at Cressey & Co.
Having operated in the home health business, Anthony and the Homecare Homebase crew saw that “existing IT solutions weren’t good enough, so they built their own,” said SV Life Sciences Managing Director Gene Hill.
Homecare Homebase software connects nurses and workers in the field to central offices, capturing billing, patient and care information, eliminating a huge amount of paper and ensuring compliance with Medicare standards, said Hill. It can be used on a variety of different platforms, including smartphones.
And because the company’s software is web-based, it can be updated immediately in response to new regulations without users having to upgrade to a different version.
While Cressey, a healthcare services investor, has “indirect experience” with healthcare software through its other portfolio companies, this is the firm’s first direct investment in the space. Thus the partnership with SV Life Sciences, which has more experience with healthcare information technology companies.
The two firms have partnered together before; both are investors in U.S. Renal Care, an operator of hemodialysis and peritoneal dialysis clinics based out of Plano, Texas.
Ehrich said the two firms invested an equal (undisclosed) amount for a “significant stake” in Homecare Homebase. The firm invested out of Cressey & Co. Fund IV LP, the firm’s first solo fund after spinning out from Thoma Cressey Bravo in 2007. Homecare Homebase is the third investment made from the raised $385 million fund, roughly one third of which is invested, according to Ehrich. SV invested out of its fifth fund, which closed in June with $523 million. Hill said it is the firm’s 12th or 13th investment out of Fund V.
Cressey’s goal is to continue to facilitate Homecare’s growth in the home health and hospice space that it serves. “The Holy Grail in healthcare is increased productivity and quality,” said Ehrich. “And that’s driven by new technology.”
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