- EBITDA up by nearly 3x
- Exit for Silver Oak Services after five-year hold
- Deal follows $209M fundraise for Fund II
Silver Oak Services Managing Partner Daniel Gill told Buyouts the transaction amounted to a “very successful deal for our investors,” although he declined to be more specific. Jamison, Penn.-based Physicians Endoscopy develops and manages walk-in surgery centers across the United States in partnership with doctors and hospitals.
The Evanston, Ill. firm said it worked with management to drive growth, improve operating efficiencies, add management depth and build scale for Physicians Endoscopy by developing new centers and buying others. Under Silver Oak Services’s ownership, the company’s footprint roughly doubled to 29 locations and EBITDA nearly tripled in about five years.
Silver Oak Services made its original investment in April 2008 from its vintage 2006 Silver Oak Services Partners LP fund, which raised about $80 million.
In a prepared statement, Pamlico Capital said CEO Barry Tanner and the company’s management team will retain significant ownership. The physicians who work at Physicians Endoscopy typically own significant minority interests in the individual centers; “several more” centers are expected to open within the next 12 months. Piper Jaffray & Co. advised Physicians Endoscopy on the deal with Pamlico Capital, a firm that was spun out of Wells Fargo in 2010.
“Our focus on making equity investments in growing and high-efficacy healthcare companies led us to Physicians Endoscopy,” said Art Roselle, a partner at Pamlico Capital, in the statement. Pamlico Capital officials did not return a phone call from Buyouts.
Meanwhile, Silver Oak Services Partners II LP held its final closing in April with $206 million in commitments with placement agent Forum Capital Partners. A Form D filing for the fund disclosed a target of $200 million and a date of first sale of July 20, 2011.
“We had good support from Fund I investors and the size of the fund grew substantially with new investors as well,” Gill said. “It’s not an easy fundraising environment, but it was a good process and we’re happy with the outcome.”
Silver Oak Services continues to focus on control investments in business services, consumer services, and healthcare services in the United States; target companies typically generate EBITDA of $3 million to $4 million on the low end and up to $20 million on the upper end.
The firm positions itself as a proactive, research-led investment shop, with three investments so far in Fund II. They include the 2011 acquisition of Directravel Holdings, a provider of outsourced corporate travel management services, and a 2012 deal for Physical Rehabilitation Network, a physical therapy clinic platform in the western United States.
In July, the firm led the acquisition of Tranzonic, a Cleveland-based distributor of disposable maintenance, cleaning and safety products, with equity and debt support from Babson Capital Management LLC.