PE firm TPG buys Mediware

LENEXA, Kan. - Mediware CEO Thomas Mann believes a new investor will help the company transition its HME and home infusion customers to CareTend and help it further build out the business management software.

Mediware announced Dec. 20 that TPG Capital, the private equity fund of alternative asset firm TPG, has entered into a definitive agreement to acquire the company from private equity firm Thoma Bravo.

“The most immediate need for our HME and IV customers is to get on this more sophisticated software and then for us to build out more advanced models for it,” Mann said. “Revenue cycle modeling is what I'm most excited about.”

Under Thoma Bravo, which bought Mediware in 2012 for $195 million, the company ramped up its position in the homecare markets with the acquisitions of Fastrack and Definitive Homecare Solutions in 2013. It released CareTend, a software program that combines the best features of all of its homecare solutions into one platform, in 2015.

While M&A activity among software companies in the HME industry has been hot in the past few years, Mann says the market has settled down, making it less about acquiring businesses and more about gaining customers.

“With our strategy to have software for multiple vertical markets in home care, we feel we have a strong position to gain share from our competitors,” he said. “That's an important part of our investment strategy, as well.”

Despite nearly tripling in size in the past four years, Mann believes Mediware still has plenty of growing to do, thanks to “macro drivers” that are putting an emphasis on non-acute facilities as the most appropriate settings for healthcare and related services. And so does TPG.

“They share that vision with us,” he said.

San Francisco-based TPG, which has more than $74 billion in assets under management, is no stranger to the larger healthcare IT market, with previous investments in companies like Evolent Health and IMS Health, or to the software market, with previous investments in vertical market leaders like Advent Software and Sabre.

Mann expects TPG “to invest a little more early on,” he said.

“We will see increased investment in the next 24 months in areas where we believe we can grow and bring even more value in five, six, seven years,” he said. “We were not looking for a new buyer, and Thoma Bravo was not anxious. What initiated this was our success and TPG's belief that they can be part of another successful cycle for the company.”