Morgan Stanley Capital Partners Completes Investment in SpendMend

The investment trust managed by Morgan Stanley Capital Partners (“MSCP”), a mid-market private equity team at Morgan Stanley Investment Management, has acquired a controlling stake in SpendMend (“Company”) from Sheridan Capital Partners. MSCP is working with current management, led by CEO Dan Gelhoed and President Rob Heminger, who will continue to lead the company, with Sheridan Capital Partners holding a minority interest in the company.

SpendMend, headquartered in Grand Rapids, Michigan, is the leading provider of tech-enabled solutions to optimize the healthcare cost cycle. The Company serves more than one-third of the top 100 health systems and is a market leader in profit recovery services, utilizing its technology-enabled platform to generate cost savings for hospitals by identifying instances of payment errors and contract non-compliance within hospitals' operating expenses. SpendMend has grown into one of the industry's largest platforms through organic growth as well as strategic M&A, completing four acquisitions since 2017.

“We are delighted to partner with SpendMend and its best-in-class management team as they continue to build a leader in cost cycle management and compliance management services to hospitals,” said Steve Rodgers, Managing Director and Head of Healthcare at MSCP. SpendMend's track record of strong organic growth and customer-centric approach are testaments to what Dan, Rob, and the SpendMend team have accomplished over the years. We look forward to collaborating to further SpendMend's market leadership in profit recovery and to expand the company through organic growth as well as strategic add-on acquisitions.

MSCP identified cost containment as a focus sub-sector within healthcare four years ago and has since pursued several opportunities in this category, including SpendMend. MSCP's investment in SpendMend aligns with the team's focus on healthcare businesses that provide high-quality, outsourced services to address inefficiencies throughout the healthcare system. The management team and the broader SpendMend employee base will retain a significant ownership stake in the company.

“We are thrilled to announce our partnership with MSCP,” said Dan Geelhoed, CEO of SpendMend. Since our inception, our goal has been to help improve patient care by providing value through our innovative cost cycle solutions. Our collaboration with MSCP will enable us to have an even greater impact.

MSCP's financial advisor was Harris Williams, and its legal counsel was DLA Piper LLP. SpendMend's financial advisor was Evercore. SpendMend's legal counsel included Kirkland & Ellis LLP and Miller Johnson.

Morgan Stanley Capital Partners Information

Morgan Stanley Capital Partners, a division of Morgan Stanley Investment Management, is a leading middle-market private equity platform with over three decades of experience investing capital in a diverse range of industries. Morgan Stanley Capital Partners focuses on privately negotiated equity and equity-related investments in North America. The firm seeks to create value in portfolio companies primarily in a series of subsectors in the business services, consumer, healthcare, education, and industrial markets, with an emphasis on driving significant organic and acquisition growth through an operationally focused approach.

Morgan Stanley Investment Management

As of December 31, 2021, Morgan Stanley Investment Management and its investment advisory affiliates had over 767 investment professionals worldwide and $1.6 trillion in assets under management or supervision. Morgan Stanley Investment Management strives to provide exceptional long-term investment performance, service, and a comprehensive suite of investment management solutions to a diverse client base worldwide, which includes governments, institutions, corporations, and individuals.

Morgan Stanley's Background

Morgan Stanley (NYSE: MS) is a global financial services firm that specializes in investment banking, securities, wealth management, and investment management. The Firm's employees serve clients worldwide, including corporations, governments, institutions, and individuals, from offices in more than 41 countries.

SpendMend Information

SpendMend assists leading healthcare organizations across the country in determining the full impact of financial leakage on their organization. SpendMend has perfected the process of holistically analyzing complex spend data to help an organization shed light on ubiquitous and pesky financial leakage as the healthcare expert in audit recovery and spend visibility. SpendMend assists clients in recovering financial leakage and collaborating with them to identify control gaps that are harboring financial leakage and improve spend visibility.