Targeting market leading companies
in high growth, high return on
capital industries.

We believe our team’s strategy consulting and growth investing heritage
positions Lee Equity Partners to source and execute investments.

Healthcare Services

BUSINESS DESCRIPTION

Eating Recovery Center, LLC (“ERC”) is the country’s leading provider of eating disorder treatment services and provides a full continuum of care for eating disorders at all levels of severity and stages of illness, ranging from medical inpatient care in a hospital setting to outpatient services.

Background and Source

Subsequent to reviewing several physician specialties in the late 2000s, Lee Equity identified eating disorders as a unique niche based on significant supply/demand imbalance, regulatory tailwinds, attractive patient unit economics, and lack of government reimbursement risk. We believe management chose Lee Equity as its preferred partner during its sale process due to its growth investing heritage and strategy consulting background to accelerate the growth of ERC.

Investment Thesis Highlights

  • Rapid growth of eating disorder incidence levels and 2.5x demand/supply imbalance
  • #1 player with industry leading clinical team with 135 years of combined experience in treating eating disorders
  • Regulatory tailwinds of federal/state mental health parity laws
  • Highly fragmented with significant consolidation potential
  • Diverse commercial in-network payors with no Medicare or Medicaid exposure

Post-Investment Value Creation

  • Lee Equity quantitatively and qualitatively ranked all major metro markets in a strategic market prioritization framework for growth, based on local supply and demand, payor concentration, payor rates, and other demographics. This growth framework had three strategic benefits – prioritization for marketing, prioritization for new facilities, and prioritization for acquisitions. 
  • ERC was led by an industry-leading clinical team and CEO. The remainder of the executive team was upgraded with a new CFO, COO, Chief Marketing Officer, and Chief Medical Officer.
  • ERC grew from a regional provider into a national leader, expanding from 3 markets into 10 markets and 10 facilities into 25 facilities. The company more than quadrupled capacity and patient census during Lee Equity’s ownership. 
  • Under Lee Equity’s ownership, ERC acquired and integrated three acquisitions.
  • ERC added a higher acuity hospital program, a mood and anxiety program, and a nationally recognized clinical team focused on binge eating disorders. 
 
 

Exit Summary

On September 21, 2017, Lee Equity Partners Realization Fund, L.P. sold ERC to a private equity firm, CCMP Capital Advisors.

Case studies have been selected for illustrative purposes only and should not be considered an offer or solicitation of services or an actual or implied endorsement of Lee Equity or any security, investment or portfolio company. The portfolio companies highlighted are not representative of all current and prior investments. Please refer to the Portfolio page for a list of all Lee Equity investments since inception.
Healthcare Services

Case Study

StatusRealized
IndustryHealthcare Services
Investment TypeGrowth Buyout
Initial InvestmentDecember 2012
Key Transaction DatesSeptember 2017 Sale to Sponsor
HeadquartersDenver, CO

Key Investment Metrics

Capital Invested$66.8 million
Realized Proceeds$283.6 million
Gross IRR36.2%
Gross MOIC4.2x
As of September 21, 2017 sale.