Linden acquires health services company after second close

Shortly after holding the second close on its debut fund at $150 million, the Chicago-based firm has acquired a disease management company in the firm’s second acquisition.

Healthcare focused Linden LLC has acquired Focused Health Solutions, a leading provider of disease management services located in Deerfield, Illinois. Terms of the transaction were not disclosed.

The acquisition comes just a few weeks after the firm reportedly held its second close on its first fund at $150 million. A source close to the firm said the fund will likely hold a final close shortly, and will finish  at its original $200 million hard cap.

FHS, which was founded in 2000, has become one of the ten largest independent companies in the growing disease management industry. The company works with self-insured Fortune 1000 companies to reduce healthcare costs through targeted disease management programs, devising a personalized program for each of its clients’ employees that encourages healthy behaviors. The company’s programs are targeted toward individuals who have been diagnosed with costly or chronic medical conditions such as asthma, diabetes, coronary artery disease, hypertension, behavioral disorders, and back and neck pain. The company has call centers staffed with nurses who help monitor patients’ conditions.

Tony Davis, managing partner at Linden, says the disease management industry is a $1.2 billion business and growing quickly.

“Disease management helps to manage chronic care illnesses which are responsible for the majority of expenditures in healthcare,” he said. “It does a better job of controlling the healthcare costs of someone with a chronic illness like diabetes than a primary care physician who may only infrequently see that patient.”

Linden was launched in 2002 by Eric Larson, who was joined by Davis and Brian Miller. The three had previously worked together at First Chicago Equity Capital, which eventually evolved into One Equity Partners and is now the private equity arm of JP Morgan. Linden is a strategic affiliate of Madison Dearborn Partners, leveraging its own capital for middle market deals and using that of Madison Dearborn Partners for larger transactions. Linden used its own fund for the FHS investment.

In April of 2005, the firm made its first acquisition in oral care product manufacturer Ranir, based in Grand Rapids Michigan.