Headshot of Mike Vaupen

As Consumers Play Larger Role in Healthcare Choices, Deal Opportunities Abound for Vestar

As Consumers Play Larger Role in Healthcare Choices, Deal Opportunities Abound for Vestar
PE Hub
By Aaron Weitzman
Published March 7, 2022

"Telehealth will increasingly become an integrated component of how care is delivered," Vestar's Mike Vaupen said.

PE Hub’s ongoing series on private equity firms investing in healthcare continues with insights from Mike Vaupen, who joined Vestar Capital Partners as managing director and co-head of healthcare in September. Previously, Vaupen was an investment professional at Welsh, Carson, Anderson & Stowe. Prior to that, he worked at Pamplona Capital Management, where he helped to establish the firm’s healthcare vertical, and also previously worked in the healthcare group at Oak Hill Capital Partners. Vaupen began his career in the healthcare investment banking division at Morgan Stanley. He outlined Vestar’s approach to healthcare investing.

Investment Strategy

“We identify the long-term mega trends that we believe will continue to shape and drive the healthcare sector over the next five, 10-plus years. We then work to target specific themes, sub-sectors, and business models that are aligned with these trends and are a good fit with our investment criteria,” Vaupen told PE Hub. “As one example, we identified consumerization as a key theme, as patients continue to act more like consumers of healthcare and play an increasingly active and informed decision-making role in their healthcare choices. That led to our investment in Friday Health Plans last year.”

Two main areas of focus for the firm are life sciences and virtual care. “We think both virtual care and life sciences have staying power and lasting implications for how these sectors will evolve, which creates investment opportunities,” he said.

“In the life sciences market, we are focused on technology that streamlines research and development of new drugs and enables digital engagement with patients and providers,” Vaupen explained.

“Virtual care has shown enormous promise and has become more widely accepted. Going forward, telehealth will increasingly become an integrated component of how care is delivered,” Vaupen said. “There will be less of a distinction between virtual care and in-person care. Patients will look to find convenient and tech-enabled ways to receive care. Providers will look for ways to reach more patients and solve their staffing challenges – virtual care addresses both of those issues.”

Merger of Tech and Healthcare

Vestar spends a lot of time at the intersection of technology and data in healthcare, as a number of the firm’s investments have been aligned to those themes, like Quest Analytics and Press Ganey.

Healthcare still has a long ways to ago when it comes to technology adoption, Vaupen explained.

“Electronic medical records, for example, were primarily designed to be digital versions of paper charts, so that was version 1.0 of moving healthcare from a paper-based industry to one that is digital,” he said. “As a result, the systems that were designed and implemented don’t interact well with each other, and that creates complications when trying to standardize data sets. There are structural challenges that prevent healthcare from moving faster in adopting technology and being able to harness the full value. We will get there, but it will take time.”

Standing Out From Competition

Longevity is a differentiating feature, Vaupen said.

"We have invested in the healthcare space for 20+ years, over multiple business and economic cycles and periods of technology innovation," he said. “More specifically, we aim to seek out opportunities where we are uniquely qualified to add value through a combination of our prior investment experience, domain expertise, industry relationships and creative approaches to growth. We also focus on being good partners to management teams and working alongside them to scale and build lasting and sustainable growth strategies.”

Regulatory Roadblocks

One of the reasons healthcare is different from other sectors is that it is highly regulated. Recently, the Department of Justice blocked the mega deal merger between United Health and Change Healthcare – which serves as a reminder that there can be regulatory roadblocks when investing in this space.

DOJ's blocking the deal serves as "a good reminder that the other aspect of healthcare that makes it challenging and complex, but also full of opportunity and potential, is the regulatory overlay,” Vaupen said. “As investors, we are always thinking about the regulatory environment, and we monitor it closely. Sometimes our investment themes are specifically designed to capitalize on regulatory trends and tailwinds. Where there are challenges, there is also opportunity.”

Firm Facts

Founded in 1988 and based in New York City, Vestar is a US mid-market private equity firm specializing in management buyouts and growth capital investments. Vestar invests in and collaborates with incumbent management teams and private owners to build long-term enterprise value, with a focus on consumer; business and technology services; and healthcare. The firm has invested over $8 billion in 84 companies – as well as more than 200 add-on acquisitions – with a total value of approximately $50 billion.

Recent Investments

Vestar invested in Friday Health Plans in 2021.

Recent Exits

Vestar partially exited Healthgrades in 2021 after investing in 2010. Vestar exited Civitas Solutions in 2019. Vestar exited Press Ganey in 2016. Vestar exited StayWell in 2016.

 

Vestar’s Healthcare Portfolio Highlights:

(Dates refer to initial investments.)

Accanto Health: A national healthcare company specializing in eating disorders and related disorders, with two nationally known brands, The Emily Program and Veritas Collaborative. (2015)
Friday Health Plans: A disruptive health insurer servicing the individual and small group markets. (August 2021)
Mercury Healthcare: A technology platform used by healthcare organizations to enable a frictionless healthcare journey through data-driven consumer and provider engagement. (2010)
Quest Analytics: Provides commercial software development and consulting services for hundreds of health plans, consultants and government agencies in the healthcare industry. (2017)


Vestar Capital Partners Promotes Kimberly Lu to Vice President

NEW YORKFeb. 15, 2022 /PRNewswire/ -- Vestar Capital Partners, a leading U.S. middle-market private equity firm, today announced that Kimberly Lu has been promoted to Vice President, effective immediately.

Ms. Lu joined Vestar in 2021 as a Senior Associate supporting the firm's Investor Relations activities. Prior to Vestar, she was an Associate at BlackRock, where she focused primarily on product strategy and business development. Ms. Lu graduated magna cum laude from the University of Pennsylvania with a BA in International Relations & Affairs.

"Kimberly has had an immediate impact on the firm since joining last year, and we know she's only getting started," said Dan O'Connell, Founder and CEO of Vestar. "She is a creative, high-energy executive who has already elevated our investor relations and marketing activities. We congratulate Kimberly, and we look forward to her ongoing contributions to Vestar."

Vestar also announced that Alyssa Stropoli has joined the firm as a Senior Associate, supporting the Investor Relations team. Most recently, she was an Associate in Investor Relations at BC Partners, and previously she was an Associate on BlackRock's High Yield Portfolio Management team. Ms. Stropoli holds a BSc in Civil Engineering from Macaulay Honors College at CUNY, City College.


PetHonesty Appoints Consumer Products Executive Richard Greenberg as CEO

AUSTIN, TexasJan. 13, 2022 /PRNewswire/ -- PetHonesty, a trusted leader in premium pet health products and a portfolio company of Vestar Capital Partners, today announced it has named consumer products executive Richard P. Greenberg as CEO effective February 14. PetHonesty founder and CEO Ben Arneberg will continue to serve as a Director on the Company's Board, and he and his family will retain their significant ongoing investment in the Company.

"Rich is an inspirational leader with a track record of achieving breakthrough results and driving organizational capability," said Jeffrey Ansell, PetHonesty Chairman and Vestar Senior Advisor. "I've seen the impact of Rich's leadership first-hand, and I'm confident his principle-based and inclusive leadership approach will enable the Company to achieve its next phase of exciting growth. I'd also like to thank Ben Arneberg for his tireless efforts launching and building PetHonesty into a high-growth, high-potential business.  We look forward to his continued contributions as a Board member."

A more than 20-year CPG executive, Mr. Greenberg most recently served as Chief Commercial Officer of Sovos Brands, which launched its IPO in the fall of 2021. Sovos Brands includes leading brands Rao's Homemade, Noosa Yoghurt, Birch Benders, and Michael Angelo's. Prior to Sovos, he held key leadership positions in the household products sector, initially at the Sun Products Corporation, which was acquired by Henkel Consumer Goods in 2016, where Mr. Greenberg ultimately served as General Manager and Chief Customer Officer. Mr. Greenberg was recruited to Sun from Kellogg's Kashi Foods division. He currently serves on the Board of Vestar's Roland Foods, and he earned a bachelor's degree in business from Penn State University.

"I'm honored to join PetHonesty and serve as its next CEO as we build upon the Company's strong foundation at a time when the pet products industry is experiencing record growth and strong tailwinds," said Mr. Greenberg. "With the Company's leadership team, I look forward to partnering with Vestar and leveraging their industry relationships and resources as we drive the PetHonesty brand, launch meaningful innovation, and delight pets and pet parents with products that make a difference to pet health and well-being."

"Bringing Vestar on was a significant step in fueling PetHonesty's growth trajectory, and the addition of Rich will further accelerate the Company's strategic expansion plans," said Mr. Arneberg. "I'm proud of the innovative company we've built to address the needs of pets and pet parents, and am energized by the tremendous talent and resources we have been able to attract to help the Company unlock its enormous potential."

 

About PetHonesty 
PetHonesty is a trusted leader in premium pet health products. Founded in 2018 and headquartered in Austin, TX, the company provides a natural and noticeable boost to pet health through natural, science-backed products that demonstrate effectiveness pet parents can truly see. PetHonesty's products are formulated to help address a plethora of common pet ailments, including immobility, digestive issues, and allergies. The company's world-class customer service provides personalized guidance and education to help light the way to more joyful, healthy years for pets and pet parents. PetHonesty products are available via its website as well as through Amazon and Chewy. For more information, please visit www.pethonesty.com.


A tonal version of the Vestar logo on a dark blue ground.

Vestar Capital Partners Promotes Three to Managing Director

NEW YORKJan. 6, 2022 /PRNewswire/ — Vestar Capital Partners, a leading U.S. middle-market private equity firm, today announced the promotions of Jake OlsonDiya Talwar, and Mike Vaupen to Managing Director.

"Jake, Diya, and Mike have played integral roles in Vestar's success, both on the investment side and within the firm," said Dan O'Connell, Founder and CEO of Vestar. "Vestar had an active 2021, investing in five new platform companies, among other accomplishments. We expect this momentum to continue into the new year, with our new Managing Directors helping to lead this activity. On behalf of the firm, we congratulate Jake, Diya, and Mike on their well-deserved promotions."

Mr. Olson is a member of Vestar's Business & Technology Services team and serves as a Director on the Board of Stratus, a Vestar portfolio company. Prior to joining Vestar, he was a Vice President at Tailwind Capital, and began his career at Lehman Brothers and Barclays Capital. Mr. Olson holds a BA from Columbia College, Columbia University, and an MBA from Columbia Business School.

Ms. Talwar is a member of Vestar's Consumer team and serves as a Director on the Boards of Dr. Praeger's and PetHonesty,  Vestar portfolio companies. Prior to joining Vestar, she served as SVP, Business Development & Strategy at High Ridge Brands, a private equity-backed personal care company. Previously, Ms. Talwar served as VP, Corporate Development at Jarden Corporation, a publicly traded Fortune 500 diversified consumer products company where she spent 10 years involved in the completion of over 30 acquisitions. She began her career in investment banking at Dresdner Kleinwort Wasserstein and Banc of America Securities, and holds a BS in Economics from The Wharton School, University of Pennsylvania.

Mr. Vaupen is a member of Vestar's Healthcare team and serves as a Director on the Board of Quest Analytics, a Vestar portfolio company. Prior to joining Vestar, he was an investment professional at Welsh, Carson, Anderson & Stowe, focused on healthcare technology and services investing. He previously worked at Pamplona Capital Management, where he helped to establish the firm's healthcare vertical, and prior to that, in the healthcare group at Oak Hill Capital Partners. He began his career in the investment banking division at Morgan Stanley. Mr. Vaupen holds a BS in Economics from The Wharton School, University of Pennsylvania, and an MBA from Harvard Business School.

About Vestar Capital Partners
Vestar Capital Partners is a leading U.S. middle-market private equity firm specializing in management buyouts and growth capital investments. Vestar invests and collaborates with incumbent management teams and private owners to build long-term enterprise value, with a focus on Consumer, Business & Technology Services and Healthcare. Since inception in 1988, Vestar funds have invested $11 billion in 88 companies – as well as more than 200 add-on acquisitions – with a total value of approximately $52 billion. For more information on Vestar, please visit www.vestarcapital.com.


PetHonesty Appoints Dr. Greg Reinhart as Vice President of Research and Development

AUSTIN, TexasNov. 11, 2021 /PRNewswire/ — PetHonesty, a trusted leader in premium pet health products and a portfolio company of Vestar Capital Partners, today announced the addition of Greg Reinhart, PhD, to its executive team as Vice President of Research and Development.

Dr. Reinhart joins PetHonesty from General Mills, where he spent the last five years as Senior Vice President of Research and Development for the Blue Buffalo pet food brands. His previous experience spans 17 years at the Iams Company and Procter & Gamble Pet Care, including serving seven years as the Vice President of Strategic Research and Communication. He also held other positions of increasing responsibility in Research & Development within the company.

"Dr. Reinhart's expertise in pet health is unparalleled, and we are extremely excited for the elevated level of sophistication he brings to our product development initiatives," said Ben Arneberg, CEO of PetHonesty. "In addition to strengthening our Research & Development team, Dr. Reinhart's wealth of knowledge in pet nutrition uniquely positions PetHonesty to bring world-class education and guidance to pet parents around the world."

Dr. Reinhart is the author of over 250 scientific publications and 14 patents, and he is a Fellow of the American College of Nutrition. He received his Bachelor of Science degree in Animal Science, his Master of Science degree in Non-Ruminant Nutrition (Animal Science), and his Doctor of Philosophy degree in Nutritional Biochemistry (Animal Science) all from The Ohio State University. In 2014, Ohio State inducted Dr. Reinhart into the Animal Sciences Hall of Fame for his leadership in the animal nutrition sector and his efforts to combat human malnutrition.

"I am thrilled to be joining the PetHonesty team," said Dr. Reinhart. "The company's commitment to providing a natural and noticeable boost to pet health is inspiring, and I'm excited to help develop new products that will allow pet parents to enjoy more joyful, healthy years with their pets."

About PetHonesty 
PetHonesty is a trusted leader in premium pet health products. Founded in 2018 and headquartered in Austin, TX, the company provides a natural and noticeable boost to pet health through natural, science-backed products that demonstrate effectiveness pet parents can truly see. PetHonesty's products are formulated to help address a plethora of common pet ailments, including immobility, digestive issues, and allergies. The company's world-class customer service provides personalized guidance and education to help light the way to more joyful, healthy years for pets and pet parents. PetHonesty products are available via its website as well as through Amazon and Chewy. For more information, please visit www.pethonesty.com.

Media Contact:

Lambert & Co.
Jennifer Hurson
845-507-0571
[email protected] 
or
Caroline Luz
203-656-2829
[email protected]

SOURCE: PetHonesty

Related Links

http://www.pethonesty.com


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Vestar Capital Partners Named to Inc.'s 2021 List of Founder-Friendly Investors

NEW YORKOct. 15, 2021 /PRNewswire/ — Vestar Capital Partners, a leading U.S. private equity firm, today announced that it has been named to Inc.'s third annual Founder-Friendly Investors list, honoring the private equity and venture capital firms with the best track record of success backing entrepreneurs.

The list recognizes firms that entrepreneurs can trust and collaborate with while receiving the financial and strategic support they need to help accelerate growth.

"We founded Vestar on the principle that partnership with great founders and management teams is the cornerstone of any successful investment; for more than 30 years, this approach has led to exceptional outcomes for our companies and investors," said Dan O'Connell, Founder and CEO of Vestar. "In fact, over half of the investments in our two most recent funds are founder- or family-led businesses. We thank Inc. for recognizing Vestar's commitment to this style of investing, and we look forward to building steadfast partnerships with founders and entrepreneurs in the future."

Vestar has invested nearly $3 billion in more than 25 founder- and family-owned companies since its founding in 1988. Vestar's current portfolio consists of 10 founder-led businesses, including four 2021 investments – Dr. Praeger's Purely Sensible Foods, Stratus, PetHonesty and Friday Health Plans.

"Supporting an entrepreneur's vision and driving growth is more than just a financial investment. It's about building a relationship and supporting the founders beyond that initial year. These private equity firms treat the founders like partners," said Scott Omelianuk, editor-in-chief of Inc. media.

Contact:
Lambert & Co.
Jennifer Hurson
(845) 507-0571
[email protected]

Caroline Luz
(203) 656-2829
[email protected]


Logo for Stratus.

Vestar Portfolio Company, Stratus, Acquires Chicago-Based MLE

Cleveland, OH – September 28, 2021 – Stratus, a leading facilities services and brand implementation services firm, today announced the acquisition of Chicago area-based MLE Brand Services, creating a $325+ million company with nearly 850 employees throughout the United States. The newly combined Stratus and MLE facilities service offerings cover the full brand lifecycle, including interior and exterior signage, refresh and remodel construction, repair and maintenance, and energy services. Terms of the transaction were not disclosed.

Stratus, founded in 1931, has tripled its revenue since 2017 through strategic growth initiatives with its long-term customers in the retail, healthcare, financial, restaurant, hospitality, and convenience-store sectors, as well as through multiple acquisitions. The Stratus client roster includes blue-chip brands like Bank of America, Chase, CVS, Lowe’s, McDonald’s, Target, The Home Depot, and Walgreens. MLE’s reputation, expertise and production capabilities in interior branding, brand installation, and brand rollout warehousing and logistics significantly enhances Stratus’ brand implementation services portfolio, while further expanding its multi-solution facilities services offering.

“MLE and Stratus both have stellar reputations for service, quality, and brand partnership, so this acquisition is a natural next step,” noted Tim Eippert, CEO, Stratus. “Our capabilities are highly complementary, and by joining forces we’ll be able to provide a more holistic offering to our combined client base.”

MLE was founded in 2002 by Mike Loftus, who grew the company to over 130 employees in the Chicago area by building strong relationships with blue-chip customers. The MLE management team will remain intact, and Mr. Loftus will join the Stratus Executive Leadership Team led by Mr. Eippert, effective immediately. “Together, Stratus and MLE will provide superior and seamless end-to-end in-house service offerings, with our clients at the center of everything we do,” said Mr. Loftus.

Headquartered in Mentor, Ohio, Stratus has operations centers in Illinois, Ohio, Florida and New Jersey, and manufacturing facilities in Illinois and South Carolina. Stratus is a portfolio company of Vestar Capital Partners.

About Stratus

Stratus is a leading brand implementation and facilities services company offering signage solutions, energy services, repair and maintenance programs, and refresh and remodel capabilities across 50 states and 24 countries. With more than 50,000 projects completed annually, the Company provides versatile solutions for some of the world’s largest and most recognized brands. For more information, please visit www.stratusunlimited.com.

About Vestar Capital Partners

Vestar Capital Partners is a leading U.S. middle-market private equity firm specializing in management buyouts and growth capital investments. Vestar invests and collaborates with incumbent management teams and private owners to build long-term enterprise value, with a focus on Business & Technology Services, Consumer, and Healthcare. Since its founding in 1988, Vestar funds have invested $11 billion in 88 companies – as well as more than 200 add-on acquisitions – with a total value of over $50 billion. For more information on Vestar, please visit www.vestarcapital.com.


Michael Vaupen Joins Vestar Capital Partners

NEW YORK, NY – September 14, 2021 - Vestar Capital Partners (“Vestar”), a leading middle-market private equity firm, today announced that Michael Vaupen has joined the firm as a Principal and senior member of its healthcare team, focusing on healthcare technology and services. Mr. Vaupen will be responsible for all aspects of the investment lifecycle, from deal sourcing to portfolio company management, and will play a key leadership role in the Firm’s healthcare practice.

“Mike has deep experience in healthcare technology investing, which aligns perfectly with Vestar’s investment focus, and we are confident that he’ll have an immediate impact at the firm,” said Norm Alpert, Co-President and head of Healthcare at Vestar. “As patients, providers, and payers all look to use technology to make more informed decisions on the cost and quality of care, healthcare technology is playing an increasingly important role. We look forward to Mike’s contributions as we identify and partner with innovative companies in this rapidly evolving space.”

Mr. Vaupen joins Vestar from Welsh, Carson, Anderson & Stowe, where he focused on healthcare technology and services investing. Prior to that, Mr. Vaupen was an investment professional at Pamplona Capital Management, where he helped establish the private equity firm’s healthcare vertical, and in the healthcare group at Oak Hill Capital Partners.  He began his career in the healthcare investment banking group at Morgan Stanley. Mr. Vaupen earned his Bachelor’s degree in Economics from The Wharton School of the University of Pennsylvania and received his MBA from Harvard Business School.

“I am thrilled to join the Vestar team given the firm’s long history of successful healthcare investing,” said Mr. Vaupen. “I look forward to partnering with my colleagues and our portfolio company management teams as we look to creatively deliver value and capitalize on strong healthcare technology industry tailwinds.”


Headshot of Ian Singleton.

Vestar Capital Partners Promotes Ian Singleton To Vice President

NEW YORK, NY – September 7, 2021 - Vestar Capital Partners, a leading U.S. private equity firm, announced today it has promoted Ian Singleton to Vice President.

"Ian is an invaluable member of the team and has taken an active role across many of our consumer and business & technology services-focused investments," said Dan O'Connell, Founder and CEO of Vestar. "We congratulate Ian and look forward to his increasing contribution as the firm grows and moves forward."

Ian joined Vestar in 2019, having previously worked as at Ares Management in their U.S. Direct Lending Group. He began his career in the Financial Sponsors Group at Citigroup. Ian graduated magna cum laude from Duke University with a B.A. in Psychology, a minor in Economics, and a certificate in Markets and Management Studies.


A tonal version of the Vestar Logo on a seafoam colored ground.

ILPA Releases Second Report in Diversity in Action Series

August 31, 2021 (Washington, D.C.) The Institutional Limited Partners Association (ILPA) today released the second report in its Diversity in Action – Sharing Our Progress series. The report series is an extension of ILPA’s Diversity in Action initiative and aims to provide actionable recommendations on steps that can be taken to improve diversity, equity and inclusion in private markets.

“The industry continues to respond positively to the Diversity in Action Initiative with new signatories joining every week,” said Steve Nelson, CEO of ILPA. “The Initiative now claims 180 signatories who have all been incredibly active in conversations with one another and have acted as tremendous partners to ILPA on our related work, having meaningfully contributed to our updated ILPA Diversity Metrics Template.”

The Diversity in Action – Sharing Our Progress report series tracks the evolution of Initiative signatories by geography, strategy and fund size as well as progress on adoption of all the actions within the Framework. As of August 2021, the Initiative’s geographic reach is increasing, now with 38 signatories outside North America, a 52% increase in this cohort since April.

The latest report focuses on how signatories are integrating diversity, equity and inclusion into investment strategies including in manager selection, due diligence and ongoing evaluation and monitoring. Of note:

  • DEI is clearly a focus beyond initial investment making decisions, with many signatories monitoring DEI on a recurring, annual basis – 58% of allocators and 45% of GPs are doing this. Signatories indicate that this information is being put to good use, both informing GPs’ value creation plans or shaping LPs’ future investment decisions
  • GPs have prioritized board diversity: 83% of GP signatories currently track gender diversity on portfolio company boards, 26% of GPs engage on diversity even where they do not have the ability to influence board appointments, and 24% of GP signatories have set board diversity targets
  • LPs remain focused on information gathering and qualitative assessments, still 21% of LP signatories indicate that progress on DEI will be considered as a factor in the decision to invest in a successor fund

“We’re pleased to bring awareness to how some of the industry’s leaders are approaching DEI through this ongoing report series,” added ILPA’s Managing Director of Industry Affairs and Diversity in Action initiative lead Jen Choi. “We’re hopeful that those who are just beginning their journey on DEI can take some actionable advice from the signatory insights in this report.”

The report also highlights proposed revisions to the ILPA Diversity Metrics Template. First released in 2018 as the industry’s first standard for capturing team-level diversity, the signatory group has provided input to help modernize the Template to reflect the current state of reporting in the market, as well as long-term goals for enhanced reporting. The Template is now out for public comment through September 24, 2021.

Media Contact:

Kari Grant
Director of Strategic Communications, ILPA
[email protected]

+1 416-941-9393