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Sentinel bets on home healthcare

The New York-based firm continues its franchise strategy with the purchase of the largest home healthcare provider in the US.

Sentinel Capital Partners has acquired Interim Healthcare, the largest provider of home healthcare and supplemental health care staffing services in the United States. Financial terms of the sale were not disclosed. The investment is coming from Sentinel’s third fund, which closed at $319 million in April of 2005.

The firm says the acquisition is the perfect nexus of two of its main strategies: acquiring successful franchises and investing in healthcare services. Based in Sunrise, Florida, Interim is the nation’s oldest healthcare franchise organization with an average owner tenure in excess of 23 years and more than 300 service locations in 39 states and Puerto Rico. The company has a workforce of 75,000 employees.

Interim’s core business provides nurses, therapists, home health aides and other specialized caregivers for treatment in people’s homes.

“There are a lot of nice trends in this industry,” said Sentinel partner Jim Coady. “There is anticipated to be high single digit growth, fueled by the graying of America, as the average age in America increases. Research says patients prefer to be treated in the home. It’s also been documented that it’s cheaper to treat a patient in the home.”

Interim also has a second business providing supplemental staffing for healthcare facilities, mostly for short-term assignments as needed.

As a franchise operation, Interim also fits into Sentinel’s strategy of investing in both franchisee and franchisor operations. The firm has completed several transactions in both the franchising and healthcare sectors in the last two years. In 2004 the firm sold Castle Dental Centers to BrightNow! Dental and in 2005 it acquired Metro Dentalcare, a dental clinic operator in the twin cities area. Last year the company also sold Falcon Holdings, one of the largest franchisees in the worldwide chain of Church’s Chicken restaurants, to its management team.