News
NewSpring Capital Announces Successful Exit of TMG Health
TMG Health Acquired by Health Care Service Corporation of Chicago
Radnor, Pa., November 13, 2008 – NewSpring Capital today announced that TMG Health, Inc. (TMG), a portfolio company of NewSpring Ventures L.P., the dedicated growth and expansion stage venture fund of the NewSpring Capital fund family, has been acquired by Health Care Service Corporation (HCSC) of Chicago. Financial terms of the transaction, which closed on October 31, 2008, have not been disclosed.
NewSpring Ventures led TMG’s Series C Preferred stock round of financing in 2002, together with existing investors SCP Private Equity and CIP Capital. TMG’s founder and CEO, Jack Tighe, also participated.
“We are extremely proud of our affiliation and investment in TMG,” commented Brian G. Murphy, General Partner of NewSpring Capital and former board member of TMG Health. “The extraordinary performance of TMG led to NewSpring Ventures realizing a greater than 10x return on our investment and an over 50% internal rate of return. In fact, this has been one of NewSpring Ventures’ most successful deals to date. Clearly, even in today’s challenging market environment, great assets continue to be highly valued by strategic buyers.”
Fueled by their unique offering of products and services serving the healthcare market, TMG Health has grown to become the nation’s leading provider of business process outsourcing for Medicare, Medicaid and group retiree health plans. Since 2002, TMG’s revenues have increased more than ten-fold, from $7 million in 2002 to over $70 million in 2007. In 2008, TMG expects revenues to approach $90 million. Over the last six years, TMG has increased the number of “covered lives” to an industry-leading 2.4 million in 2008. TMG’s presence in Northeastern Pennsylvania has expanded from 200 employees in 2002 to more than 1,100 presently, with offices in King of Prussia, Dunmore and Scranton, Pennsylvania.
“At NewSpring Capital, we look to invest in healthcare solutions that solve major clinical or administrative challenges through a unique offering of products and services that address the needs of an aging population,” continued Murphy. “TMG Health, led by Jack Tighe and his team, fit that profile. TMG targets the large and growing markets of Medicare and Medicaid insurers, presenting attractive long-term administrative outsourcing solutions. In addition, their expertise in the operations of government-sponsored health plans makes outsourcing an attractive proposition for customers. We extend our best wishes to Jack Tighe and all the TMG Health employees as they embark on their next phase of growth as part of the HCSC organization.”
Jack Tighe, founder and Chief Executive Officer of TMG, said: “I want to thank the TMG Health board and our investors for diligently supporting our vision for the company and providing the capital to facilitate our goals for growth. Our success is directly attributed to the hard work, entrepreneurial spirit and dedication of our employees, the many clients that trust us to manage their government health plans, and the strong, visionary leadership of our management team.”
Contact:
Veronica Rosa
610.567.2386
