SpendMend
SpendMend is a provider of cost cycle management services to the healthcare industry.
SpendMend identifies inefficiencies across customers’ payables, such as identifying vendor “leakage,” duplicate payments, open credits, contract compliance, spend analytics and insights, and sales & use tax recovery opportunities.
Sheridan had an active investment thesis focused on cost-containment solutions for providers. Through proactive sourcing efforts aligned with this thesis, Sheridan partnered with the founders of SpendMend in 2018.
People
In addition to growing the employee count by over 150% during the partnership, Sheridan invested in numerous executive hires to round out the leadership team. Key hires included a CFO, VP of Operations, VP of Sales, VP of Marketing, and expanding a two-person IT team to over 15 people to augment technology capabilities for clients.
Organic Growth
Sheridan worked with SpendMend to develop three new service lines and invested meaningful resources into sales and a strategic rebranding initiative, which drove 20%+ annual organic growth on average and significantly increased cross-sell of service lines across the platform. Sheridan’s operations resource team worked with management to analyze pricing strategies while elevating the business to 90%+ recurring revenue.
| Website | spendmend.com |
| Sector | Cost Cycle Management |
| Location | Grand Rapids, MI |
| Status | Partially Realized |
| Investment Date | January 2018 |
We could not be more pleased with the outcome of our partnership with Sheridan. Since the very beginning, the Sheridan team invested in our organization and our people to advance our mission of helping hospitals improve patient care through the delivery of our innovative cost-savings solutions.
Dan Geelhoed CEO & Co-Founder | SpendMend
Dan Geelhoed is not an investor in Sheridan and is not being compensated for sharing his opinion and experience with our firm. Any compensation creates a conflict of interest and Dan's comments may not be representative of any other person's experience with the firm.
Acquisitions
Sheridan’s business development team and investment professionals worked with SpendMend to complete three accretive acquisitions. The company acquired Contract Management Strategies, expanding SpendMend’s capabilities into medical device compliance and sales & use tax spend categories. The company also enhanced its core offering and launched SpendMend Pharmacy in 2020 via its acquisition of Turnkey Pharmacy Solutions and Elevate340B.
Sheridan Capital Partners (SCP) recapitalized the business with Morgan Stanley Capital Partners in 2022, retaining a minority ownership stake and board seat. Through these strategic initiatives and partnership with Sheridan, at the time of exit in 2022, SpendMend served over 70% of the top 50 Integrated Delivery Networks (IDNs) nationwide, including 2,700+ healthcare facilities, and provided oversight and actionable insights to its customers on more than $200 billion of annual spend under management.
Highlights
Revenue Growth
Acquisitions
New Service Lines
with Sheridan