Column: Atlanta Equity investment group buys physician services firm

By Maria Saporta
Friday, October 7, 2011

Atlanta Equity Investors has just sold one of its five portfolio companies, but it has turned right around and invested in a health-care services company based in Lexington, Ky.

“The summer usually sucks in the private equity business, and we are bucking that trend,” said Gerry Benjamin, who is an Atlanta Equity partner along with former Georgia-Pacific CEO Pete Correll and David Crosland, formerly with Arcapita.

On Oct. 3, Atlanta Equity sold its interest in Richmond Cold Storage, which it had bought in April 2009 for $15 million, to Southeast Cold Holdings, a unit of Bay Grove Capital.

Crosland said Atlanta Equity had not intended to sell Richmond because it had wanted to use the company as a platform investment for future acquisitions. But Bay Grove approached them unsolicited and made them an attractive offer.

“It’s a great deal for us,” said Crosland, who would not disclose details of the deal. “You hope all transactions will turn out like that. It’s great for the management of Richmond, because they will be able to be part of a larger empire. And it will be a great deal for Bay Grove.”

Atlanta Equity, however, has turned right around and purchased another major investment in Marshall Physician Services.

“For three years, we have been looking for a health-care services contracting management firm,” Benjamin said. After looking at countless possible investments, Atlanta Equity ended up partnering with Marshall, acquiring 75 percent of the firm.

“The physicians continue to own equity,” Benjamin said. “They wanted capital and management partners. Now they can go back and be clinicians. They see us as a management team that can take them to the next level.”
Marshall has exclusive contracts with hospitals to staff their emergency rooms. It also has contracts to provide hospitals with physicians who can provide continuous care to patients. Those physicians are called “hospitalists.”

“There’s a shortage of hospitalists,” Benjamin said. “Hospitals are going to need more outsourced services.” Both the emergency room and hospitalists are part of a $33 billion market.

Marshall currently employs 250 physicians and manages about 500,000 patient encounters a year. “We think we can quadruple the business in three to five years,” Benjamin said.

Atlanta Equity has brought in two health-care industry professionals to manage Marshall’s growth. Larry Kraska is stepping in as CEO and Waite Popejoy has been tapped to be Marshall’s new chief financial officer.

“I see a tremendous opportunity to expand from the Kentucky region to adjoining states and the rest of the Southeast,” said Kraska, who will continue living in Atlanta as will Popejoy.

Aderhold hires Aynsley

Aderhold Properties has hired Derek Aynsley to become vice president for investments and business development, a newly created position.

Aynsley previously served as president of Winter Properties, a developer that has specialized in adaptive reuse. He also served as executive director of the Atlanta Preservation Center.

Aderhold Properties, founded by the late John Aderhold, is one of Atlanta’s leading developers involved in historic preservation and adaptive reuse. It is the owner, developer and manager of the Fulton Bag and Cotton Mill, the Roosevelt, the Muses Block in downtown Atlanta, and the Brumby Chair Factory in Marietta.

New leader at WIT

The Atlanta-based nonprofit Women in Technology has named a new executive director — Stephanie Hill.

Hill has more than 20 years of experience leading technology and nonprofit organizations, most recently serving as managing principal of business development for Magellan Associates, a managing consulting firm. Previously, she served as chief financial officer for the IT Senior Management Forum, a national nonprofit dedicated to cultivating executive talent among African-American IT professionals.

“Hill has an impressive résumé of experiences which are sure to benefit the WIT community,” said Sandra Hofmann, WIT’s president, in a statement. “She has well-established skills in leadership, and the business acumen and strategic vision necessary to sustain and grow WIT.” Hill will join WIT on Oct. 17.

New Kiwanis president

Atlanta Kiwanis installed its new officers at its meeting on Oct. 4, welcoming Mack Secord as its new president. Secord succeeds Kathy Kite, who has served as president for the past year.

In her farewell message to the club, Kite thanked the members of Kiwanis for helping the children of Atlanta in multiple ways — from the Dean Rusk Head Start Academy to the Kennedy Middle School Builders Club, the Carver Early College Key Club and the Georgia State Circle K.

Economic educators

The Georgia Council on Economic Education has elected eight new members to its board.

They include Richard Boger, president of Lex-Tek International; Mike Buck, chief academic officer of the Georgia Department of Education; James Hamilton Jr., managing director and Southeastern manager for Morgan Keegan & Co.; Kevin Humphrey, chief compliance officer of Perimeter Capital Management; Bonita Jacobs, president of North Georgia College and State University; Anita Paul, director of communications for the Georgia Credit Union Affiliates; Emily Sanders, president and CEO of Sanders Financial Management; and Joel Thornton, chief of staff for the Georgia Department of Education.

All of them will serve three-year terms on the council’s board, which is chaired by Gary Price, managing partner at PricewaterhouseCoopers LLP. Kirby Thompson, senior vice president of government affairs for SunTrust Banks Inc., is vice chairman.

The Georgia Council helps teachers teach economics through workshops, classroom materials and programs like the Stock Market Game and the Georgia Economic History Project.