Daily News: March 27, 2012

Riverside Acquires SMS; PNC, Medley Capital Ink Financing


The Riverside Company has acquired Milwaukee-based Specialized Medical Services, Inc. (SMS) as a combination with RCS Management Corporation (RCS). Both companies provide respiratory equipment, oxygen and related products and services to nursing homes and hospices throughout the U.S. PNC and Medley Capital provided financing for the transaction.

The combination establishes the largest provider in the nation, covering more than 40 states and nearly 1,800 facilities, including 12 of the 20 largest nursing home chains in the country. Clients will benefit greatly from the acquisition, as the combined entity will increase its ability to assist them in managing their equipment and oxygen needs. The newly formed company will offer the best systems and the broadest array of services in the industry, including respiratory equipment, comprehensive oxygen services, disposable supplies, along with clinical, billing and consulting services.

“This combination creates a unique entity in the space,” said Riverside managing partner Loren Schlachet. “No competing firm offers the comprehensive blend of products and services, national footprint, and excellent customer service. This is a winning combination.”

The company will combine two strong management teams, with Steve Marshall from SMS serving as CEO of the combined company, Jim Smith of RCS serving as President and COO, and David Beck of SMS serving as CFO.

“We are very pleased with this transaction,” said Marshall. “The combined resources and talent at SMS and RCS will give customers across the country the ability to retain one provider for all of their respiratory-related needs – including the ability to leverage the combined company’s expertise in billing and clinical support. In addition, the company will continue to expand its growing offering into the hospice market. We have a great opportunity with the merging of these two companies, and I’m looking forward to keep growing as a bigger and better combined entity.”

Working with Schlachet on the transaction for Riverside were principal Jack Nestor, operating partner Dave Logan, assistant vice president Dan Haynes, senior associate Marques Martin, senior associate John McKernan, and Riverside Micro-Cap Fund Finance director Dave Pecore.

Jones Day was Riverside’s legal counsel, and Deloitte & Touche advised Riverside on financial due diligence.

The Riverside Company is a global private equity firm focused on acquiring growing businesses valued at up to $200 million.