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Cardon Outreach Merges with Diversified Healthcare Resources

San Francisco, CA – September 9, 2015 — Serent Capital, a leading San Francisco-based private equity firm focused on investing in growth technology and service businesses, announced that its portfolio company Cardon Outreach has completed a transaction to merge with Diversified Healthcare Resources (DHR). DHR is a leading provider of eligibility and enrollment services for California hospitals and healthcare facilities.

Serent originally invested in Cardon Outreach in January 2011 based upon a thesis to invest in a technology-enabled provider of complex revenue cycle management services to healthcare providers. Since Serent’s initial investment, Cardon Outreach has achieved strong organic revenue growth, invested significantly in its proprietary technology platform, and executed on a successful acquisition strategy that has expanded and meaningfully broadened the Company’s value proposition to its clients. As a result, Cardon Outreach is growing at over 20% per year organically, and has achieved overall revenue growth exceeding 30% annually since 2011 based on three acquisitions to date.

The merger with DHR creates the leading independent, national provider of technology-enabled eligibility and other revenue cycle management services, with a broad suite of offerings including patient eligibility, early out, third-party liability, disability, and A/R services. Together, the companies will serve over 600 hospitals and 300 clinics in 43 states, employing 1,100 team members across the nation, all managed through a common, proprietary technology platform.

In particular, the merger enables Cardon Outreach to:

Enter the California market, the country’s largest and most complex Medicaid market, by partnering with the most successful and fastest growing eligibility services provider in the state
Replicate Cardon’s cross-sell strategy by offering its broader suite of service offerings to DHR’s client base, including early-out and disability advocacy, each of which is growing at over 25% annually within Cardon Outreach
Realize the benefits of scale from each company’s investments in technology

Serent believes that there are significant organic and acquisition-driven growth opportunities remaining in this highly fragmented market. Cardon Outreach’s national scale and market-leading technology will allow the company to continue to take share from competitors, particularly those unable to maintain investment levels required by the rapidly changing healthcare reimbursement landscape, while selectively consolidating the market.

Cain Brothers advised Cardon Outreach on this transaction.

This transaction marks Serent’s sixth healthcare investment since 2010. We continue to be committed to investing behind innovative and growing technology and service companies in this large and complex sector.

About Serent Capital
Serent Capital invests in growing businesses that have developed compelling solutions that address their customers' needs. As those businesses grow and evolve, the opportunities and challenges that they face evolve with them. Principals at Serent Capital have firsthand experience at capturing those opportunities and navigating those challenges through their experiences as CEOs, strategic advisors, and board members to successful growing businesses. By bringing its experience and capital to bear, Serent helps growing businesses thrive.

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