Inside Baseball – Issue 7 – January 2009
by: Molly Cate | posted January 4, 2009
Desperate for the same dose of ‘Hope and Change!’ that presidential inauguration attendees lapped up two weeks ago, more than 450 people have registered for today’s Nashville Health Care Council’s Wall Street Analyst Panel, sponsored in part by yours truly. (That’s record breaking attendance just in case you are keeping score.)
Why is attendance up? Maybe in part because the suits that are usually scouring the country cutting deals are here at home waiting for the money truck to roll back in. By all accounts, Nashville’s deal machine – not to mention the entire country’s economy – is on life support, with most executives hunkered down and focused on survival. In 2008, healthcare services M&A deals were down – dollar wise – by 68% and hospital deals – again dollar wise – down by 70 %.
Nonetheless, there’s always opportunity … right? According to insiders, two opportunities lie ahead in 2009: distressed asset sales, a.k.a. fire sales, and strategic deals, which for those of you who don’t know the i-banking lingo, means deals that make sound strategic sense for a company based on their growth plans or projections.
But the truth is this: Predictions for 2009 are all over the board. When boiled down to their essence, most outlooks are Ivy League ways of saying “hell if I know.” So while you are taking copious napkin notes at today’s luncheon, we thought you could benefit from a handy list of the Top Magic 8 Ball Responses. We will leave it up to you to apply these time-tested predictions to your favorite industry segments over your coffee and dessert.
– Ask Again Later
– Outlook Not So Good
– Outlook Good
– Better Not Tell You Now
– Don’t Count on It
– It Is Certain
– Most Likely
– Reply Hazy, Try Again
– Signs Point to Yes
– You May Rely On It
DRAFTS and TRADES
Speaking of Hope and Change!, word has it that Nancy Ann DeParle was highly sought after by the Obama administration for the Deputy Secretary of Health job under Tom Daschle. DeParle, managing director of CCMP Capital’s healthcare group, turned down the offer however. Well respected and a director on numerous boards, including hospital company Legacy Health Partners, DeParle was head of CMS – then called HCFA – under President Bill Clinton. A Tennessee native, DeParle also served as Commissioner of Human Services under Governor Ned McWherter.
Flush with cash, local VC firm Council Ventures has tapped Grant Jackson from The Aurora Funds, Durham, N.C., to oversee healthcare services and healthcare IT investments. Led by heavy hitters Denny Bottoroff and Katie Gambill, Council Ventures recently closed on a roughly $80 million fund. Jackson was a partner at Aurora, where he led the firm’s healthcare IT and services investment efforts in expansion-stage companies. Among Council Ventures’ healthcare investments are Notify MD, Senior Whole Health, and Benefit Informatics. Council is actively seeking investments, so by all means greet Grant with open arms!
Other VC firms on the prowl for investments include Louisville-based Chrysalis Ventures and Memphis-based SSM Ventures. Chrysalis was started by former Humana Chairman David Jones. Meanwhile, Memphis-based SSM has a local connection through the recent addition of VC veterans Larry Coleman and Dave Swenson to their ranks as partners.
Insiders say that local VC firm Claritas Capital is starting a mezzanine fund and has hired Burton Harvey from Morgan Keegan to bolster their efforts. Aside from Morgan Keegan, Harvey worked for Finova Mezzanine Capital (formerly Sirrom). Started by former Richland Ventures exec John Chadwick and former Massey Burch exec Don McClemore, Claritas has funded 27 companies. Among their locally based healthcare investments are Surgical Health Group, Physicians Capital, DigiScript and HCCA Intl.
DEALS IN PLAY
Speaking of money, word has it that former Healthways exec Justin Lanning is on the prowl for investments for his new company Credence Health. Lanning is looking to raise between half a million dollars and $1.5 million. According to its website, Credence Health is a “global leader in surgical quality improvement.” There are some heavy hitters involved with Credence Health, including Board Chair Steven Geringer, who sits on the executive board of new local VC player Cressey and Co. Lanning, meanwhile, is President and CEO of Credence. At Healthways, he served as Value Assurance Leader. (We will leave that to you to figure out what that means.)
Jerry Tannenbaum’s latest venture Diversified Specialty Institutes, which now operates more than 100 dialysis centers, is shutting down its Bucks County, Penn., specialty hospital. A “Comprehensive Breast Cancer Institute,” the facility couldn’t attract enough patients to cover their costs. DSI, which also specializes in plastic surgery centers, is the same crew that Tannenbaum has started numerous companies with over the years. (RenCorp and NNA) Interestingly, the company’s web site says Tannenbaum is Chairman of the board. Leif Murphy, who worked with the group at National Nephrology Associates, is now listed as the company’s President and CEO. Murphy has held senior level financial positions at HealthSouth, Renal Care Group and most recently pharmacy benefit manager CareMark.
Being the source on all things deemed hot topics in healthcare, Jarrard Inc., along with Workplace Partners Communications, Old Town Alexandria, Va., and IRI Consultants, Detroit, Mich., are hosting a seminar on Labor Unions and Healthcare on February 12 at the Marriott in Cool Springs. With more than $450 million invested in the recent election, sweeping legislation on the horizon and record success with organizing drives, labor unions have deemed healthcare and hospitals their targets for the foreseeable future. Our seminar will provide key insights on this topic, ranging from a CEO case study to labor communications to a legal panel overview of the Employee Free Choice Act. To learn more or to register, please click here http://www.jarrardworkplacestrategies.com/