Water Street Healthcare Partners Announces New Investment in Medical Specialties Distributors, LLC

Health Care Private Equity Firm Acquires Leading Home Infusion Distributor to Expand Group of Companies

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Jul 30, 2010, 09:02 ET

CHICAGO, July 30 /PRNewswire/ -- Water Street Healthcare Partners, a leading private equity firm focused exclusively on health care, announced today that it has acquired Medical Specialties Distributors, LLC (MSD). Headquartered in Stoughton, Massachusetts, MSD is the nation's leading provider of infusion products, supplies, biomedical services and technology solutions to the growing home infusion therapy market. The acquisition expands Water Street's current group of health care companies to 12.

With U.S. demographics shifting toward an older population and an increasing number of people suffering from chronic conditions, the Centers for Medicare and Medicaid Services projects that home health care expenditures will reach more than $90 billion by 2014. As demand for providing intravenous (IV) therapy to people in their homes continues to increase, MSD has grown to serve more than 4,000 customers. The company supports a broad base of customers including specialty pharmacies and home infusion companies, such as Accredo Health Group, Inc., Coram Specialty Infusion Services and Walgreens Health Initiatives, Inc., as well as oncology clinics.

"MSD is uniquely positioned as the only national distributor that specializes in serving the needs of home infusion providers," said Rob Womsley, partner, Water Street Healthcare Partners. "It has achieved steady growth by offering customers comprehensive solutions that support them with effectively managing and utilizing their products and supplies to ensure they meet their patients' day-to-day needs. Our intention is to build on MSD's strong foundation and technology leadership to expand its services to the increasing number of providers who are enabling people to receive drug therapy services at home."

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. Jim Beck, president and CEO of MSD, will continue to lead the company and its current management team. He will work closely with Water Street's team, which includes former executives of global distribution businesses such as American Hospital Supply Corporation, Baxter International Inc. and McKesson Corporation.

"Water Street is the ideal partner to help MSD advance our services and capabilities to provide greater value to our customers in this growing market," said Beck. "I have known its partners for many years and believe they have an unmatched level of expertise building and operating specialty distribution businesses. MSD will benefit tremendously from Water Street's expertise and ideas for how we can expand our services to the growing number of infusion centers and oncology clinics that are treating patients in the home."

MSD marks Water Street's 25th transaction to build and create value in its portfolio of companies since its founding five years ago. The firm's companies operate in a range of health care sectors including specialty distribution, medical devices and products, and specialty services. MSD is Water Street's third investment in the medical distribution sector. The firm also owns Sarnova, which has grown to become the leading national distributor to the respiratory and emergency medical services markets after Water Street acquired and merged Bound Tree Medical and Tri-anim Health Services, Inc. in 2008.

"Water Street is focused on building market-leading companies in attractive growth sectors of health care," said Jim Connelly, partner, Water Street Healthcare Partners. "Over the past five years, our team of health care leaders has creatively sourced opportunities and partnered with global leaders to methodically build a diverse group of companies with strong potential for expansion. We will leverage our deep industry expertise and network of relationships to transform them into market leaders of significant value that are poised to achieve long-term sustainable growth."

About Medical Specialties Distributors, LLC

Medical Specialties Distributors (MSD), LLC is the primary distributor of medsurg products and biomedical equipment into the alternate site infusion marketplace. MSD's additional services include formulary development, online ordering, equipment management and tracking, and patient direct delivery programs. MSD is an authorized distributor for most of the healthcare industry's leading group purchasing organizations and is also ISO 9001:2000 & ISO13485:2003 Certified. For more information, visit http://www.msdonline.com or contact Medical Specialties Distributors at (800) 967-6400.

About Water Street Healthcare Partners

Water Street Healthcare Partners is a leading private equity firm focused exclusively on health care. With more than $1 billion of capital under management, Water Street is one of the most active investors in the health care industry. The firm has a strong record of building market-leading companies across key growth sectors in health care. It has partnered with some of the world's leading health care companies on its investments including: Johnson & Johnson, Medtronic and Smith & Nephew. Water Street's team is comprised of industry executives and private equity professionals with decades of experience investing in and operating global health care businesses. The firm is headquartered in Chicago. For more information about Water Street, visit www.wshp.com.

SOURCE Water Street Healthcare Partners