VSS seals 4x exit to Riverside

Riverside has purchased Avatar International, which focuses on patient satisfaction in hospitals, an increasingly important component in Medicare and Medicaid services.

Veronis Suhler Stevenson has sold healthcare services company Avatar international to The Riverside Company, generating a more than 4x return multiple, the firm said in a statement.

Avatar provides patient surveys and other customisable tools related to patient satisfaction to hospitals and healthcare providers. VSS invested in the company in 2008 from its first mezzanine fund, VSS Structured Capital I, and retained an investment bank to run an auction for the company after receiving “a significant amount of unsolicited interest,” partner at VSS David Bainbridge told Private Equity International.

Terms of the sale were not disclosed.

Patient satisfaction is becoming an increasingly important component in Medicare and Medicaid services, according to Riverside partner Suzanne Kriscunas.  “We think that it plays into certain areas of healthcare today that are going to be important going forward,” she said. “More and more, Medicare is looking to reimburse programs for pay-for-performance and value-based purchasing. We think that’s a good place to play, and Avatar fits right in.”

Golub Capital provided financing for the deal through its Golub One Loan Debt, or GOLD loans, a uni-tranche product which combines traditional senior and junior debt terms in a single senior facility. The deal marks Golub’s fifth transaction with The Riverside Company.

“The most beautiful thing about a uni-tranche loan – when you do it with a relationship lender who can be rational and reasonable about a problem – is that it actually increases the odds that the deal will be successful,” Golub president and founder Lawrence Golub told Private Equity International in a prior interview. If a problem does arise, pursuing a workout with just one group can also be significantly less expensive than having to settle with a long list of lenders.”