Blackford Capital Acquires Medical Debt Buyer Key Health Medical Solutions, Inc.

Blackford Capital — a national private equity firm headquartered in Grand Rapids, Mich. that acquires, manages and builds middle-market manufacturing, distribution and service companies — announced recently the acquisition of Key Health Medical Solutions, Inc., a large specialized healthcare finance company and national purchaser of medical debt.

Key Health provides secured financing to facilitate the delivery of medical care to patients who have been injured as a result of a motor vehicle accident or other type of personal injury accident.  Through its relationships with medical providers throughout the United States, including five of the largest independent diagnostic imaging providers, Key Health purchases over $35 million in medical accounts receivable per year. Key Health works with a broad range of medical providers, including MRI, physical therapy, pain management and both out-patient and in-patient surgical providers.

Key Health is based in Westlake Village, Calif., currently employs 60 people and has an asset base of $70 million. The company’s funding of over 500,000 medical cases translates into institutional knowledge that is unmatched in the industry.  Key Health is also the only company in the industry that owns or has access to actuarial and financial outcomes data.  The company’s proprietary software application, KeyMEDS, the only program of its kind within the industry, allows for a more rigorous due diligence process, leading to more favorable collection outcomes. Blackford Capital also partnered with Convergent Capital and Comerica Bank to complete the transaction.

“Key Health has a strong customer base and deep industry experience, and we see tremendous opportunity for growth in the $3.5 billion medical-legal funding industry,” said Martin Stein, founder and managing director of Blackford Capital. “Through the broadening of relationships and creation of strategic partnerships, we have plans to grow the company’s portfolio assets to more than $500 million over the next five to seven years.  We expect to grow organically and acquisitively, and we are aggressively pursuing a number of add-on acquisition candidates for Key Health.  We believe we have the strongest management team in the industry, and Blackford is fully committed to supporting them in their continued penetration of the medical funding market.”

Blackford Capital reviews roughly 2,000 transactions per year with the goal of closing four to six deals, and has closed 21 transactions in the past five years. Key Health is the third transaction completed in the past eight months by Blackford Capital, with an aggregate transaction value for the three deals of $61 million. The firm’s investment criteria include mature, profitable businesses with revenues between $20 million and $100 million, a profit margin of at least 10%, and with owners looking to retire or exit from the business.

“Key Health was founded with the goal of helping patients’ access quality healthcare services and overcome the roadblocks that often come with a lien or letter of protection claims,” said Jeff Trigilio, President and Chief Executive Officer of Key Health.  “For 15 years, we have built a solid reputation managing the relationship between patients, attorneys and healthcare providers.  We believe Blackford Capital has the resources and financial strength to help us build upon that reputation and accelerate our growth.”

Founded in 2000, Blackford Capital is a private equity firm that acquires, manages and builds middle-market manufacturing, distribution and service companies. The firm combines detailed due diligence and operational experience with the seasoned M&A expertise of a traditional financial buyer. Blackford currently has portfolio companies based in six states employing more than 800 people and combined revenues of approximately $200 million. Blackford Capital has offices in Grand Rapids, Mich. (headquarters) and San Francisco.

Key Health, established in 1996 and located in Westlake Village, Calif., is the nationwide leader in providing unique financial solutions to healthcare facilities and healthcare providers. Through the company’s Lien Solutions Program, Key Health funds quality medical care on a lien/letter of protection basis for patients who have been injured as a result of a motor vehicle accident or other type of personal injury accident.