New York-based Harvest Partners this month completed a $145 million refinancing of its portfolio company Home Care Supply Inc. The financing came in the form of additional equity and mezzanine capital, and investors included prior lenders led by Heller Health Care Finance and equity investors Davis Tuttle Venture Partners as well as new investors Rice, Sangalis, Toole & Wilson and Prudential Capital. UBS Warburg served as the private placement agent for a portion of the senior and subordinated debt financing.
Harvest Partners originally invested in Home Care in 1998 and, to date, total equity invested in the company is around $95 million, said William Kane, a general partner at Harvest Partners “It’s very difficult to get a committed acquisition line today and we were very fortunate to get one because we were creative, flexible, and structured, and we looked to the expanding available senior debt market to include insurance companies and institutional investors,” said Kane. The firm structured the facility around a significant amount of senior debt for the company’s future add-on acquisitions.
Kane said the firm intends to continue to generate revenue growth as well as make “prudent” acquisitions. “We now have a very nice company under letter of intent that will add significant revenues and Ebitda contributions to the base business,” he said.
Harvest Partners intends to concentrate on value creation for the company and has no plans on exiting its portfolio in the foreseeable future. “Over time we will explore the usual lists of exit options including a sale to a strategic acquirer, but, given the right state of the equity market for health-care services, a public offering is possible as well,” said Kane.