PartsSource has announced that it has been acquired by Great Hill Partners, a leading growth-oriented private equity firm. The acquisition will allow the company to accelerate its sales and marketing investments and further position the company to execute on its growth plan.
“PartsSource’s e-commerce technology has disrupted a workflow that has historically been offline, allowing providers to maintain their facilities efficiently and more cost effectively,” said Mark Taber, a managing partner of Great Hill. “We are delighted to partner with Phil Settimi and the entire PartsSource team to help them continue to expand their market leadership.”
Founded in 2001, PartsSource’s core electronic spend management platform automates the procurement process of medical parts and supplies from product sourcing to financial settlement, incorporating proprietary analytics to optimize compliance, efficiency, cost and quality. In addition to automating the highly complex workflow associated with procurement, the company created and maintains the industry’s only online, fully integrated parts procurement marketplace. PartsSource facilitates more than 1.5 million transactions annually by connecting thousands of suppliers and OEMs to over 3,300 hospitals worldwide.
“PartsSource has experienced rapid growth in recent years and has emerged as the leader in the medical supplies procurement space, empowering our customers to drive costs out of the health care delivery system while improving outcomes,” said PartsSource CEO Phil Settimi, M.D. “We are pleased to collaborate with Great Hill, who will offer both the experience and resources to fully maximize the value of our health care solution, while maintaining our commitment to first-class customer service, innovation and quality.”
“We believe PartsSource has tremendous growth potential as procurement teams within health care seek ways to digitize their workflows via a one-stop-shop for medical parts and supplies,” Rafael Cofiño, a partner with Great Hill Partners, added. “It has been exciting to watch them build the online category leader.”
“I am proud of the team that has contributed to PartsSource’s emergence as the leading procurement solution for the health care industry and believe we have found the right partner in Great Hill to build on its accomplishments to date,” PartsSource founder and Executive Chairman Ray Dalton said.
PartsSource will join Great Hill Partners’ portfolio of health care companies including Qualifacts, RxBenefits, PlanSource, Passport Health Communications (acquired by Experian for $850 million), SterilMed (acquired by Johnson & Johnson) and bSwift (acquired by Aetna for $400 million). Additionally, Great Hill has extensive experience in e-commerce and electronic marketplaces, including companies such as Wayfair, The Shade Store, Cliq Studios and Momondo (acquired by The Priceline Group for $550 million).
As part of the transaction, Mark Taber, Rafael Cofiño and Cheng Li will be joining the PartsSource’s Board of Directors. Sellers in the transaction include Ray Dalton, Polaris Partners and Primus Capital Funds. Financial terms of the deal were not disclosed.
Robert W. Baird & Co. served as exclusive financial advisor to PartsSource. Goodwin Procter LLP served as legal advisor to Great Hill Partners. Jones Day LLP served as legal advisor to PartsSource.