HealthMark Case Study - WSC & Company

Name of Company: HealthMark Group

Industry: Healthcare Information Services

Company Overview:
HealthMark Group is a leading provider of digital health information management solutions for healthcare providers across the country. Guided by over 15 years of experience in healthcare IT, HealthMark is pioneering an efficient, compliant and patient-centric approach to the patient information journey. The company’s patient engagement and release of information solutions help thousands of hospitals and clinics transform administrative processes into seamless digital encounters. HealthMark Group is based in Dallas, TX and has been named to both the Dallas 100 and the Inc. 5000 for multiple years in a row as one of the fastest growing companies in the region and across the country.

Location: Dallas, TX

Search Fund:
Holland Course Capital

Searchers:
Bart Howe & Matt Howe

WSC Involvement:
Badge Stone (board member)

Website:
https://www.healthmark-group.com/

The Search: Holland Course Capital

At his 5-year reunion at Harvard Business School, Bart Howe sat in on an Entrepreneurship through Acquisition course. While he had been broadly familiar with the search fund model, Bart learned more about the level of impact and autonomy that the model grants to first-time CEOs and was hooked. Soon after the reunion, Bart texted his brother, Matt, to see if he would be interested in partnering with him to raise a search fund and “without hesitation Matt was in,” Bart said. The two had always talked about working together and after numerous conversations to confirm fit, roles and objectives, Bart and Matt decided to become business partners and began raising their search fund in 2017.

When assembling their cap table, the searchers tried to meet all their investors in person including Badge Stone, founding partner of WSC. “It was important for us to understand who was behind each check. As a former searcher and now investor, we felt that Badge deeply understood the search fund space and had seen a lot of deals from both sides so we could leverage his experience.”

The searchers looked to their investors as connectors and thought partners during the search process. When evaluating deals, the Howe brothers “went to WSC early because they were willing to help us think about the pros and cons of an industry or a business and appropriately frame our questions to a seller to get the information we needed to quickly make a decision.” Further, Bart shared “Whenever we called Badge or Macon [co-founders of WSC], they were excited with us about the opportunities we were looking at. Even when the businesses were a bit crazy or off the wall, Badge and Macon were willing to dig into them with us and be excited about that process. They kept a positive outlook and thought about what the opportunity could be.”

After reviewing thousands of businesses and submitting 27 IOIs and LOIs throughout their search, they had 3 businesses under LOI concurrently. After initial diligence of all three businesses, they decided to pursue HealthMark and passed the others to peer investors.

Getting the Deal Done: HealthMark Group

Bart and Matt’s initial call with the owner of HealthMark, Scott Bagley, was on the calendar for 30 minutes, but lasted over an hour and a half. “We connected about being Texas A&M Aggies, our interests in healthcare, and other shared experiences. We both explained what we were looking for in the next chapters of our careers.” Bart appreciated that Scott was a great seller, explaining, “Scott was very logical and structured in his ways of thinking and operating. He had sold a business before he knew what he was doing.”

While no deal process is linear, the Howe brothers were able to stay on track by being transparent in their communication and working on the deal points upfront with both their investors and the seller: “There was a lot of respect in the room. While negotiations were intense from time to time, both my brother and I and the investors knew where the line was and never crossed it,” Bart shared.

Throughout the deal process, the Howe brothers continued to build a strong relationship with Scott. They eventually asked him to join their board and remain a part of the company post-sale. Since, Scott has joined the ETA community as an investor in WSC, search fund investor, and board member of many search fund-backed businesses.

Advice to Future Searchers

If you were to search again, what would you do differently?
“I would build conviction around an industry thesis (or two) before even starting the search. That will help narrow the focus and enable you navigate to the right actionable players within that sector faster and with a more compelling pitch.”
What’s something about the deal process that you wish you knew before?
“No deal is perfect, and every deal will fall apart at least once before it closes. Don’t lose hope, but be willing to walk away if you must (which I easier said than done).”
3. What do you think every first-time CEO needs to do in their first 100 days?
“Listen and learn. Don’t try to pull too many levers too fast. I always recommend a thorough Start/Stop/Continue exercise to gauge the sentiments from the team.”

If you’re interested in learning more about HealthMark Group or the Healthcare Information Services industry, please contact us. We’d love to chat with you!

The Search: Holland Course Capital

Getting the Deal Done: HealthMark Group

Operating The Business

Advice to Future Searchers

If you were to search again, what would you do differently?

What’s something about the deal process that you wish you knew before?

3. What do you think every first-time CEO needs to do in their first 100 days?

If you’re interested in learning more about HealthMark Group or the Healthcare Information Services industry, please contact us. We’d love to chat with you!

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