Ensemble Health Partners had one employee when Judson Ivy founded the company in 2014. Today, the revenue cycle management provider has 4,600 employees and 28 clients serving facilities in 38 states and two countries.
Mason, Ohio-based Ensemble has achieved significant growth over the past five years, and it recently secured an investment from a private equity firm. On May 29, Ensemble announced that Cincinnati-based Bon Secours Mercy Health will sell 51 percent of the equity in Ensemble to Golden Gate Capital, a private equity investment firm in San Francisco.
The deal, which is expected to close in the next two months, is valued at roughly $1.2 billion, people familiar with the matter told The Wall Street Journal.
Private equity firms have made various investments in healthcare billing companies. In fact, investors devoted $610.8 million to digital companies to operate the back office in hospitals and physicians' offices in 2018, according to the WSJ, which cites data from Rock Health, a digital health seed investor and research group.
The Ensemble transaction began to take shape as the RCM company sought to continue investing in technology and platform growth.
"John [M.] Starcher [Jr.], president and CEO of Bon Secours Mercy Health, and I came to the conclusion that we needed to bring in external capital to ensure continued delivery of exceptional results for current and future partners through enhancements in technology, services and people," said Mr. Ivy, CEO of Ensemble. "It was really kind of a mutual understanding to say, 'We have an amazing offering. It has been very successful. But we'd like to bring in some private capital to help us continue to innovate and attract the top operators in American healthcare.'"
As part of the deal, Bon Secours Mercy Health will remain a commercial partner to Ensemble and a minority owner in the company. The health system will also continue to serve on Ensemble's board. Meanwhile, Golden Gate will help Ensemble fund new technology development and acquisitions.
Ensemble and Bon Secours Mercy Health both view the arrangement as beneficial.
Mr. Ivy said Golden Gate's extensive amount of experience in financial technology is especially exciting.
"We have many groundbreaking innovations that our team has developed to drive major efficiency gains in revenue cycle operations. We're excited about applying Golden Gate’s fintech expertise to make it more efficient and convenient for patients," he said.
For Bon Secours Mercy Health, the Ensemble deal will strengthen the system's financial picture amid its efforts to expand hospital and clinic operations and pour resources into innovation and community health, Mr. Starcher, the system's chief executive, told the WSJ.
"We are committed to continued investment in the communities we serve, and this capital will allow us to continue to provide better access to high-quality healthcare for all who need it," he said.