Repositioning a Business



Interim Healthcare Holdings, Inc.

Healthcare; Franchising


Repositioning a Business

Company: Interim Healthcare Holdings, Inc.

Position: Healthcare; Franchising

Location: Sunrise, Florida

Date of Investment: May 2006

Exit Date: October 2012

Company Description
Established in 1966, Interim is one of the nation's largest providers of home healthcare services through a national franchise system. Its franchisees, who operate more than 325 branches across 37 states, deliver a range of home healthcare services including home nursing, home hospice care, and home assisted living. Interim provides daily care to more than 50,000 people and generates annual systemwide sales of approximately $750 million.

Interim's prior owners originally invested in the business in 1997, shortly before a significant legislative change dramatically impacted the home healthcare industry. Over the next few years, Interim embarked on a difficult organizational and balance sheet restructuring. After owning the business for nine years, Interim's owners retained an investment bank to manage a sale. We were contacted because of our franchising and healthcare services capabilities.

The Opportunity
Under prior ownership, Interim had embarked upon an expensive, company-owned branch expansion and a diversification of service lines outside home healthcare. The result was that Interim was not tightly focused, and growth in its core home healthcare franchising business had stalled. Nonetheless, Interim's franchising business was stable, had a strong brand name, and was well positioned to benefit from a powerful demographic trend—the graying of America. We saw an opportunity to do a major repositioning of the business and return Interim to a pure-play home healthcare franchisor. Key elements of the repositioning included:


  • Refocusing Interim on its core home healthcare franchising business by divesting noncore healthcare operations and Interim's captive healthcare software assets

  • Refranchising all company-owned branches and transitioning Interim into a pure franchisor


Refocused the Business: Interim refranchised all its company-owned branches, divested its non-core travel nurse staffing and occupational health businesses, spun off its physician staffing business, and sold its captive home healthcare software division. Concurrently, Interim rebuilt its new franchise sales capability, which had been dormant for a decade.

Recruited New CEO to Replace Retiring Founder: Prior to Sentinel acquiring Interim, its founder/CEO indicated his desire to retire after more than 40 years of active management. With his help and active involvement, we hired as Interim's new CEO a proven home healthcare executive and nurse by training, and successfully executed a smooth leadership transition.

Expanded Home Healthcare Service Offerings: Recognizing additional opportunity in home healthcare, Interim launched two new services—home hospice care and home assisted living. Similar to home nursing care, these services cater to an aging population and are now offered by many of Interim's franchisees.

In 2012, having held the investment for six years and successfully achieved our investment objectives, we sold Interim to another private equity firm in a management buyout transaction. During our ownership, we helped Interim to transition into a focused home healthcare franchisor and expand its home healthcare service offerings. The result was that Interim accelerated its growth and significantly increased its free cash flow.

North American Rescue, LLC

Aerospace / Defense; Healthcare


Repositioning a Business

Company: North American Rescue, LLC

Position: Aerospace / Defense; Healthcare

Location: Greer, South Carolina

Date of Investment: October 2009

Exit Date: February 2015

Company Description
North American Rescue is the leading developer and distributer of tactical emergency medical equipment to the U.S. military, foreign militaries, and civilian first responders. Founded in 1996, NAR provides armed forces medical personnel, first responders, and other healthcare professionals solutions that decrease preventable deaths on the battlefield and in dangerous environments. NAR is considered a thought leader in emergency trauma care and has collaborated with the military medical community, government organizations, and civilian institutions in developing tactical medical and rescue training standards.

NAR's founders were former U.S. Military special operations medics who saw first-hand the need for improved casualty care to treat combat injuries. By leveraging their significant casualty care experience, they developed new life-saving products for the U.S. Military that are now standard-issue equipment for combat soldiers and tactical vehicles. We partnered with management to further professionalize NAR's infrastructure to support future growth, expand sales beyond U.S. Military markets, and enable the founders to achieve certain estate planning objectives.

The Opportunity
NAR's founders had built an entrepreneurial market leader in providing combat casualty care products to the U.S. Military. In 2008, U.S. Military sales represented 94% of NAR's total sales. We saw an opportunity to also position NAR as a leader in tactical emergency medical care in foreign military and non-military markets, key elements of which included:

  • Enhancing NAR's infrastructure to support growth

  • Purchasing a proven and well-established brand with strong market position that was poised to continue growing

  • Expanding sales in civilian first responder and law enforcement markets

  • Penetrating allied foreign military markets


Enhanced NAR's Infrastructure to Support Growth: NAR added personnel, systems, procedures, and processes, including ISO 9001 and 12485 certifications, Berry amendment compliance, and 510(k) clearance, to support growth.

Continued to Develop Innovative New Products: NAR continued to develop new solutions, modify and enhance legacy products for new end markets, and introduce new products for non-military markets.

Aggressively Expanded into Adjacent Markets: Over Sentinel's ownership period, NAR more than tripled sales in the civilian first responder and law enforcement markets.

Penetrated Allied Foreign Military Markets: During Sentinel's ownership, foreign military sales grew from 2% of NAR's total revenues to 17%, driven by state-of-the-art products and training and geopolitical events that led to increased global conflict.

In 2015, having held the investment for more than five years and successfully achieving our investment objectives, we sold NAR to another private equity firm in a management buyout transaction. By the end of our ownership, NAR's sales to the U.S Military accounted for approximately 60% of its total revenues, down from 94% when Sentinel made its original investment. The result was that NAR became a more diversified business and remains well positioned to pursue multiple avenues of growth.