Parthenon Adds to Health-Care Portfolio –

Recapitalization specialist Parthenon Capital has invested $25 million for a 70% stake in Pharmedica, a family-run business it plans to make into a world-class organization. The total enterprise value for the deal was $70 million, and J.P. Morgan Chase provided senior debt to fund the transaction.

Pharmedica is the umbrella name for Pharmedica Communications, ContexMedicus and The Center for Health Care Education, a company that was founded by Lawrence Timmerman and his wife, Carolyn Timmerman, over their garage in 1989 and today has $80 million in revenue and employees 200 professionals, including computer animators, consultants, software engineers, video producers and writers. In addition to its headquarters in Killingworth, Conn., Pharmedica maintains offices in Malvern, Pa., Essex, Conn., Morrisville, N.C., and Chicago, Ill. The company provides marketing services and continuing medical education programs for pharmaceutical manufacturers such as Aventis, Bayer AG, GlaxoSmithKline and Pfizer.

Ernest Jacquet, founder of Boston, Mass.-based Parthenon Capital, says his goal is to grow Pharmedica by 30% to 40% a year.

“We’ve prepared a 100-day plan [outlining] very detailed strategic and operational steps we need to take to accelerate growth,” he said.

For example, Parthenon is beginning to reorganize the sales force and plans on adding new sales people to the team. “Part of the purpose [of the reorganization] is to increase the size of the firm,” he added.

Timmerman, Pharmedica’s sole shareholder until recently, will remain the company’s president and a minority shareholder. “We’d grown quite rapidly over the years, but had reached the stage where we were poised for major growth and needed additional resources and guidance to grow,” said Timmerman, in a statement.

“Larry’s company was not really for sale,” said Jacquet. “But he needed to start thinking about estate planning, and with the recapitalization saw an opportunity to dramatically grow the company. The deal allows him to retain control, to preserve the entrepreneurial environment, but he’s not betting his retirement everyday.”

Parthenon made the investment through its $750 million Parthenon Investors II LP, which the firm closed in September. This is its third investment with the new fund, and the second health-care investment.

Sperry, Mitchell & Co., an investment banking concern specializing in providing merger and acquisition advice to middle-market companies, approached Parthenon with this transaction, and served as financial adviser to Pharmedica.