Charterhouse in $260m healthcare exit

The US firm, together with Highlander Partners and MTS Health Investors, has generated a 45% IRR by on its investment in Chamberlin Edmonds.

A trio of investors led by Charterhouse Group has sold healthcare services company Chamberlin Edmonds to Emdeon for $260 million.

The three firms – Charterhouse, Highlander Partners and MTS Health Investors – generated a 45 percent internal rate of return on their original investment, made in May 2008. Charterhouse invested just over $100 million from its Charterhouse Equity Partners IV fund, which targets investments in the healthcare services, business services and consumer products and services sectors.

The firm had initially planned for an investment period of three to five years, but ended up selling Chamberlin after just over two years due to “substantial EBITDA growth” and “unsolicited interest” from number of companies, Charterhouse managing director Taylor Cole told PEO.

Chamberlin Edmonds is a provider of “government program eligibility and enrollment services” for healthcare facilities. The company assists hospitals in lowering the incidence of uncompensated care by securing reimbursement from Medicaid, Social Security Disability and other benefit programs.

Emdeon is a provider of healthcare revenue and payment cycle management solutions. Included in the transaction for Chamberlin Edmonds is a $100 million financing commitment with Citigroup Global Markets.

Since making its initial investment in Chamberlin, the Charterhouse-led consortium increased the company’s hospital customers from roughly 140 to about 200.

In July, Charterhouse sold wireless network operator NewPath to Crown Castle for $115 million, just 15 months after making its initial investment.

Charterhouse Equity Partners IV is an open fund targeting $450 million. Established in 1973, the firm has invested over $2 billion in over 100 companies.