LLR Partners Inc. and Quaker BioVentures Inc. said they had invested $28 million in Medmark Inc.
The equity investment will be used to fund Medmark’s growth plans and to repurchase a portion of shares owned by Medmark’s parent company.
Medmark, headquartered in Pittsburgh, is a rapidly growing specialty pharmaceutical distributor that provides a broad range of specialty drugs, supplies and services to meet the unique needs of individuals with chronic illnesses.
Prior to the transaction, Medmark was majority owned by Highmark Inc., the largest health insurance company in Pennsylvania and one of the largest in the United States.
“Medmark is proud to be affiliated with two high quality private equity firms,” said Peter Smith, Chief Executive Officer of Medmark. “LLR brings significant experience in working with later stage growth companies, and familiarity with the specialty pharmacy distribution sector, while Quaker is the leading private equity firm focused on the medical sector in the Mid-Atlantic region, with a strong knowledge of the pharmaceutical and biotechnology industries.”
Medmark was formed by Highmark as part of its long-term strategy to help contain rising prescription drug costs for specialty pharmaceuticals and provide better care for its members. A portion of this financing will be utilized to deliver Medmark’s unique service offerings to other health insurance companies across the country.
“We are extremely excited about our investment in Medmark due to its extraordinary growth prospects, superior service offerings and experienced management team,” said Howard Ross, a Partner with LLR. “Medmark’s unique payor-focused strategy will enable the company to quickly expand its customer base to include other large health insurance companies. We look forward to partnering with Medmark as it continues its impressive growth.”
“Quaker is extremely enthusiastic about the Medmark investment,” said Sherrill Neff, a Managing Partner in Quaker. “Strategically, this gives us a tremendous opportunity to participate in major biotechnology industry developments in product pricing and reimbursement issues, and a great vantage point from which to view the emerging biopharmaceutical product pipeline. Also, we are committed to Western Pennsylvania, which is a rapidly emerging center of excellence for the life science industry. Medmark is our first and LLR’s second major investment in the region.”
The investment in Medmark will also help fuel creation of new jobs in Pennsylvania, according to state executives. Dennis Yablonsky, Secretary of the Pennsylvania Department of Community and Economic Development said, “The Tobacco Settlement Investment Board committed $20 million to Quaker BioVentures with the understanding that those dollars would be reinvested in promising Pennsylvania life sciences companies that would contribute to the state’s efforts in economic development and job creation. Those investment dollars have been put to good use as they will help spin out Medmark and create jobs in Southwestern Pennsylvania.”