MBF announces sale of MSD to Water Street Healthcare Partners

Aug 2 2010

MBF Healthcare Partners, L.P. (MBF), a middle market healthcare focused private equity firm, announced it has sold Medical Specialties Distributors, LLC (MSD), to private equity firm Water Street Healthcare Partners.

“The Company's unrivaled innovation and technology offerings have proven to be an invaluable component in driving cost down in the healthcare infusion supply chain.”

MSD, based in Stoughton, Massachusetts, is the nation's leading provider of infusion products, supplies, biomedical services and technology solutions to the growing home infusion therapy market. MSD offers customers a full range of infusion equipment and disposable supplies, as well as comprehensive services that encompass biomedical rental and repairs, equipment management and tracking, and formulary development. The company employs more than 250 people, and operates eight fulfillment and service centers across the country.

"MSD has experienced tremendous growth over the last several years, which serves as a testament to the strength of the Company's management team and their passion for serving their customers in the healthcare infusion market," said MBF Managing Director Jorge Rico. "The Company's unrivaled innovation and technology offerings have proven to be an invaluable component in driving cost down in the healthcare infusion supply chain."

"We appreciate MBF's support over the last several years in helping to make MSD the largest healthcare infusion focused supplier in the country. Their deep healthcare knowledge and expertise, along with their ability to adapt and react quickly made them great partners," said MSD CEO James Beck.

MBF Chairman, Mike Fernandez, explained, "When we purchased the assets of MSD from its lenders in 2005, we were faced with the difficult challenge of turning around an underperforming company. MSD was spending more on capital expenditures than it had earnings and the company had no growth plan. We recruited former Baxter executive, Jim Beck, and provided him the capital to execute on an organic and acquisition growth strategy. MSD closed on four strategic acquisitions and created real value by integrating each add-on. MSD also augmented its sales team and infrastructure which helped them secure national distribution contracts, leverage existing customers and drive new business. These efforts allowed MSD to triple EBITDA over a four year period. In light of a very difficult economy and challenging financing markets we were able to successfully exit the investment and provide our investors a 3.5 times return on invested capital."

Houlihan Lokey Howard & Zukin Capital, Inc. served as financial advisor to MSD and legal counsel was provided by Akerman Senterfitt LLP.