Vestar Capital exits healthcare company

The New York-based firm has sold its stake in Joerns Healthcare, one of three companies Vestar spun out of Sunrise Medical since acquiring it in 2000.

Vestar Capital Partners has sold Joerns Healthcare to Joerns management and Quad-C Management, a Charlottesville, VA-based private equity firm.  
Joerns, which focuses on healthcare products for the elderly, was spun out of Sunrise Medical, a manufacturer of medical equipment, in 2006. Vestar acquired Sunrise in 2000 in a deal valued at $350 million, and contributed additional capital to other Sunrise spin-outs over the past few years. Financial terms of the transaction were not disclosed.

Other selling shareholders of Joerns include Park Avenue Equity Partners, which were original investors in Sunrise Medical alongside Vestar in 2000.

Between the partial liquidation of Sunrise and the sale of Joerns we’ve more than recouped the entire original investment.

James Elrod

The sale of Joerns marks the fourth exit for Vestar in the past eight months. In December the firm sold national food company Birds Eye Foods to Pinnacle Foods for $1.3 billion, and in January Vestar’s financial services company Symetra Financial went public in a $365 million offering. Finally, in April Vestar took speech-generating technology company DynaVox Systems public in a $141 million offering. Dynavox was one of two companies to spin out of Sunrise Medical, in 2004. The other, respiratory business DeVilbiss Healthcare, was spun out this Spring.

“Between the partial liquidation of Sunrise and the sale of Joerns we’ve more than recouped the entire original investment,” co-head of Vestar’s healthcare group James Elrod told PEO. Since 2006, Vestar has made roughly $1.9 billion in equity commitments to healthcare alone. “It’s a pretty big portion of our investment plan,” Elrod said. “We think we’re going to remain very active in it.”

At the time of the original investment in Sunrise, Joerns – then known as Sunrise Medical Long-term Care division – was unprofitable. In 2009, Joerns generated roughly $26 million EBITDA, and had annual revenues of $170 million.

Vestar’s original investment in Sunrise was made from the firm’s fourth fund, which closed on $2.5 billion in 1999. The firm is now making investments from its fifth fund, which closed in 2005 on $3.65 billion and is approximately 80 percent invested.

In addition to healthcare, Vestar invests in industries including financial services and media and communications, in companies ranging in value from $250 million to $3 billion. The firm has total assets under management of $7 billion.

Vestar was founded in 1988 when seven principles of The First Boston Corporation’s management buyout group spun out from the firm.